Visualizing Strategy and Strategic Management Process
The success of most businesses is not a random occurrence, but rather a series of right decisions taken at the right moment in time. All this starts with defining the right strategy. Organizations rely on different strategies to achieve their business goals and objectives, so they can survive, grow, and thrive in today's competitive business environment. Those strategies are not pulled out of thin air or handed to management on a silver platter; they must be developed through effective strategic management. Developing an organization's strategies requires a lot of thought and effort in their formulation and implementation. Strategies have to be formulated, implemented and executed successfully to be useful to the organization. In order to devise and successfully realize (implement and execute) a strategy, you need to be able to manage key factors such as: values, opportunities, and capabilities. Managing those factors involves analyzing each of these factors to understand how your organization can create and sustain value.
Business organization strategy can be modeled as two interacting systems of of decisions, represented by the strategic engine and operational engine respectively. Both engines are necessary and their parallel and coordinated functioning is critical to organization's strategic management success. The Strategic Engine abstraction is useful for managers seeking to understand, safeguard and enlarge the company's potential sources of competitive advantage. The Operations Engine abstraction is useful for managers seeking to understand how to efficiently manage the day-to-day activities of the organization across functional areas to achieve performance efficiency in creating value at reasonable costs.
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Strategy, however, is an intangible concept, and its not visible to the organization or those who would intervene to make it work as intended. Most managers in organizations have difficulty developing viable strategy without the determination process degenerating into solemn recording of platitudes and trappings of the strategy which is useless for either clarifying the organization's strategic direction, or achievement of consensus among managers.
A strategy can be made “visible” through visualization of the strategy's structure and dynamics as represented in the strategic engine and operations engine.
Strategy visualization enables people (managers and workers) in an organization to better conceptualized the organization's strategy in its various manifestations. Strategy visualization enables analysis and evaluation of possible solution alternatives. Strategy Visualization fosters better shared understanding of the purpose, positioning and direction of the company; the fits between resources plus competencies with opportunities, and also fits between risks and expectations to drive better decision-making and decisions. It enable better coordination in enacting policies that drive the right organizational behavior; and pushing down decisions to ensure timely and successful execution.
Business organization strategy can be modeled as two interacting systems of of decisions, represented by the strategic engine and operational engine respectively. Both engines are necessary and their parallel and coordinated functioning is critical to organization's strategic management success. The Strategic Engine abstraction is useful for managers seeking to understand, safeguard and enlarge the company's potential sources of competitive advantage. The Operations Engine abstraction is useful for managers seeking to understand how to efficiently manage the day-to-day activities of the organization across functional areas to achieve performance efficiency in creating value at reasonable costs.
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Strategy, however, is an intangible concept, and its not visible to the organization or those who would intervene to make it work as intended. Most managers in organizations have difficulty developing viable strategy without the determination process degenerating into solemn recording of platitudes and trappings of the strategy which is useless for either clarifying the organization's strategic direction, or achievement of consensus among managers.
A strategy can be made “visible” through visualization of the strategy's structure and dynamics as represented in the strategic engine and operations engine.
- The strategic engine is a system of decisions that determine how the organization should evolve in order to achieve sustainable competitive advantage leading to long-term success. A strategic engine is company specific, customized to the company's own situation and performance objectives. Operations engine visualization helps make the abstract concept of the organization's business strategy real (concrete) for members of the organization such as managers, workers and stakeholders. The business organization's strategy is defined as a layered hierarchy of strategies existing at various levels in the organization, such as: corporate level strategy, business level strategy and functional level strategy. The strategic objectives established for the various levels/layers at which strategy concept exists in the organization define expected outcomes or results areas, and what the organization wants to achieve to better meet the organization's mission.
- The Operations engine is comprised of a system of decisions related to the day-to-day activities in the organization involving all input-transformation-output processes or projects. Operational management decisions are the day-to-day decisions that shape the creation and delivery of customer value. Operational decisions are based on facts and data regarding the events and do not require much of business judgment. Operations decisions allow the organization to efficiently manage the current value chain of activities that drive the creation and delivery of customer value, and achievement of operational objectives. The Operational Engine enables an organization to capture and integrate operational events and data from all functional areas, in the value chain, to inform operational management decisions about customers, suppliers, employees, and products. The value chain activities include production and supply chain activities as well as business function areas such as marketing, finance, sales, HR, and customer service.
Strategy visualization enables people (managers and workers) in an organization to better conceptualized the organization's strategy in its various manifestations. Strategy visualization enables analysis and evaluation of possible solution alternatives. Strategy Visualization fosters better shared understanding of the purpose, positioning and direction of the company; the fits between resources plus competencies with opportunities, and also fits between risks and expectations to drive better decision-making and decisions. It enable better coordination in enacting policies that drive the right organizational behavior; and pushing down decisions to ensure timely and successful execution.
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Strategic Engine
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Operational Engine
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Strategic Management
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Operations Management
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Statements
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Strategic Engine
The strategic engine is an abstraction of the strategy process of the strategic management process. Strategic management views the organization as an open social system, highly dependent on outside resources such as suppliers and consumers, and influenced by external environment factors. Strategic management process is the means through which decisions are made, and realized. The Strategic Engine defines the concept of strategy as a system of decisions organized around a layered model comprising a 3-level hierarchy of corporate strategy, business strategy, and operations strategy with the rest of the other functional strategies as supporting tools that exist at all levels of the hierarchy.
The strategic engine relates the three (3) levels of the strategy hierarchy through a specific dual integration, built through a vertical orientation: top-down and bottom-up approach. The success of both approaches to generate advantage for the organization is reinforced by functional strategies such as; marketing, finance, IT, HR, sales, etc., that appear simultaneously at all three levels of the strategy hierarchy. The whole engine performance is synchronized and sustained through the functional strategies that provide resources and capabilities needed to reinforce performance at all three (3) strategy hierarchy levels. The strategic engine will not generate any competitive advantage for the company if it loses reinforcement of proper resources and capabilities from functional strategies.
Competitive advantage refers to factors that allow a company to produce goods or services better or more cheaply than its rivals. Competitive advantage is what makes an organization's products or services more desirable to customers than that of any of its rivals. From a system thinking perspective competitive advantage is an emergent property of the organization viewed as a system; and it's derived from the combination of corporate level comparative advantage, business level differential advantage, and operations level comparative advantage (i.e., economies of scale).
Strategic Engine Model
The Strategic Engine component model is a 3-level hierarchy goals model of corporate, business and operations strategy layers of organization strategy with reinforcing relationships to functional strategies at each level in the hierarchy. The organization strategy goals model is an intentional goals model of the intended/deliberate corporate, business and operations strategy layers The goals model integrates the strategy hierarchy of the different levels of corporate, business and operations strategy levels into a coherent organization system model that aligns with the organization system purpose - defined by mission goals.
The three (3) levels of strategy hierarchy are interrelated through a specific dual integration, built through a vertical orientation - top-down and bottom-up interactions. Top-down implies Operations strategy has a vertical relationship with corporate and business strategy, that might come down from the levels above. Bottom-up implies operation strategy comes from within operations to improve resources and capabilities, and informs business and corporate strategy decisions. All the levels in the hierarchy have horizontal relationships with functional strategy. The unique combination of top-down (CS and BS) with bottom-up (OS and BS) approaches ensures the right fit of organization strategy levels.
The strategic engine model is useful for managers seeking to safeguard the competitive advantage of their companies.
The strategic engine is an abstraction of the strategy process of the strategic management process. Strategic management views the organization as an open social system, highly dependent on outside resources such as suppliers and consumers, and influenced by external environment factors. Strategic management process is the means through which decisions are made, and realized. The Strategic Engine defines the concept of strategy as a system of decisions organized around a layered model comprising a 3-level hierarchy of corporate strategy, business strategy, and operations strategy with the rest of the other functional strategies as supporting tools that exist at all levels of the hierarchy.
The strategic engine relates the three (3) levels of the strategy hierarchy through a specific dual integration, built through a vertical orientation: top-down and bottom-up approach. The success of both approaches to generate advantage for the organization is reinforced by functional strategies such as; marketing, finance, IT, HR, sales, etc., that appear simultaneously at all three levels of the strategy hierarchy. The whole engine performance is synchronized and sustained through the functional strategies that provide resources and capabilities needed to reinforce performance at all three (3) strategy hierarchy levels. The strategic engine will not generate any competitive advantage for the company if it loses reinforcement of proper resources and capabilities from functional strategies.
Competitive advantage refers to factors that allow a company to produce goods or services better or more cheaply than its rivals. Competitive advantage is what makes an organization's products or services more desirable to customers than that of any of its rivals. From a system thinking perspective competitive advantage is an emergent property of the organization viewed as a system; and it's derived from the combination of corporate level comparative advantage, business level differential advantage, and operations level comparative advantage (i.e., economies of scale).
Strategic Engine Model
The Strategic Engine component model is a 3-level hierarchy goals model of corporate, business and operations strategy layers of organization strategy with reinforcing relationships to functional strategies at each level in the hierarchy. The organization strategy goals model is an intentional goals model of the intended/deliberate corporate, business and operations strategy layers The goals model integrates the strategy hierarchy of the different levels of corporate, business and operations strategy levels into a coherent organization system model that aligns with the organization system purpose - defined by mission goals.
- Corporate Strategy (CS) - Corporate strategy revolves around the objectives of the organization, core competencies, and gaining competitive advantage in terms of products and/or services offered, target markets and customer segmentation. It involves choices about the scope of the organization's products, the vertical and geographic coverage, and identifies investment priorities for the businesses based on current market positions.
- Business Strategy (BS) - Business strategy is concerned with creating competitive advantage through differentiation or cost leadership in specific market and customer segments. The point of interest is on how the organization competes within a specific industry/market as constrained by competitive priorities (established through the SWOT analysis). It involves decisions and choices regarding competitors, and the nature of competition and competitive advantage. And formulating responses to changes in the industry, crafting competitive moves and market approaches leading to sustainable competitive advantage by building valuable, rare and hard to copy competencies and capabilities.
- Operations Strategy (OS) - Operations strategy is the system of decisions that are aimed at shaping both the long-term capabilities of operations (irrespective of their type), and their contribution to overall strategy achievement. It consists of a series of decisions that organizations make in order to implement competitive business strategies. Operations strategy supports in linking operational-level decisions, both short-term and long-term, to corporate strategy.
The three (3) levels of strategy hierarchy are interrelated through a specific dual integration, built through a vertical orientation - top-down and bottom-up interactions. Top-down implies Operations strategy has a vertical relationship with corporate and business strategy, that might come down from the levels above. Bottom-up implies operation strategy comes from within operations to improve resources and capabilities, and informs business and corporate strategy decisions. All the levels in the hierarchy have horizontal relationships with functional strategy. The unique combination of top-down (CS and BS) with bottom-up (OS and BS) approaches ensures the right fit of organization strategy levels.
- Top-down Direction- Top-down implies Operations strategy has a vertical relationship with corporate and business strategy, that might come down from the three levels. The whole process begins with establishing Corporate Strategy (CS) goals. Posing questions about business portfolios and investment decisions, such as "Where?", "How much?", and "What kind of?". Then it follows the business strategy (BS), identifying how to compete in specific markets and industries, trying to find coherent answer to a generic question "How?", and with which generic strategy to compete. And finally the operations strategy (OS) comes, that should provide the right answer to a specific question "How?", ("Which way to compete?"), to deliver the highest result from the sum of of the basic performance objectives - speed, quality, dependability and flexibility ar appropriate cost level.
- Bottom-up Direction - Bottom-up implies operation strategy comes from within operations to improve resources and capabilities. Operations strategy tries to improve these objectives, supports and reinforces the final outcome.of Business Strategy (BS) to achieve sustainable competitive advantage that in turn, contributes to achieve superior economic returns on a corporate level. Based on results of business strategy (BS), executive managers decide on entering/leaving markets, enlarging/shortening the value chains, or pursuing business diversification. Once the dyadic flow of information is completed, further refinement of the whole process might start again, based on the outcome of this process.
The strategic engine model is useful for managers seeking to safeguard the competitive advantage of their companies.
Operational Engine
The Operational Engine is an abstraction of the core business processes or operational processes. Operational processes are the key activities or cluster of activities which must be performed in an exemplary manner to ensure a firm's continued competitiveness because it adds primary value to the firm's goods and services. Operations is the business function that transforms inputs into outputs - the goods or services offered to customers.
Many organizations strive to optimize their business operations to ensure they have adequate existing capacity (permanent[1] or contingent[2]) to meet service standards and productivity objectives while reducing the need to expand facilities. Manufacturing and service operations employ a number of different strategies for managing demand and capacity in order to improve resource capacity utilization, operations efficiency, and performance measures such as smaller inventories, reduced lead times, and consistent and on-time delivery of value to customers.
The Production System model is an Operations System comprised of set of activities or processes involved in converting labor, materials, etc., into goods or services and resource configuration with resulting competencies to meet particular combination of performance objectives expressed in terms of measures such as quality, reliability, etc. The objectives are translation of identified marketing factors that a selected group of customers want.
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Business operations constitute many processes including materials acquisition and inventory management, manufacturing/production, product delivery, service delivery, etc. Capacity utilization impacts business performance. Capacity analysis helps to determine whether the business is running at optimum capacity utilization. It can help spot if the resources are being under utilized or if the employees are working over-capacity. It can also help the business to determine how much and when to increase capacity.
Operational Engine is an abstraction of the system of operations management decisions about utilizing the operations systems to efficiently manage the organization's operational value chain. The operations engine is comprised of the system of processes that produce goods and services delivered to customers.
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Operational control decisions involve determining which organization units will carry out the tasks, establishing criteria for completion, resource utilization, and evaluating outputs.
The Operational Engine is an abstraction of the core business processes or operational processes. Operational processes are the key activities or cluster of activities which must be performed in an exemplary manner to ensure a firm's continued competitiveness because it adds primary value to the firm's goods and services. Operations is the business function that transforms inputs into outputs - the goods or services offered to customers.
Many organizations strive to optimize their business operations to ensure they have adequate existing capacity (permanent[1] or contingent[2]) to meet service standards and productivity objectives while reducing the need to expand facilities. Manufacturing and service operations employ a number of different strategies for managing demand and capacity in order to improve resource capacity utilization, operations efficiency, and performance measures such as smaller inventories, reduced lead times, and consistent and on-time delivery of value to customers.
The Production System model is an Operations System comprised of set of activities or processes involved in converting labor, materials, etc., into goods or services and resource configuration with resulting competencies to meet particular combination of performance objectives expressed in terms of measures such as quality, reliability, etc. The objectives are translation of identified marketing factors that a selected group of customers want.
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Business operations constitute many processes including materials acquisition and inventory management, manufacturing/production, product delivery, service delivery, etc. Capacity utilization impacts business performance. Capacity analysis helps to determine whether the business is running at optimum capacity utilization. It can help spot if the resources are being under utilized or if the employees are working over-capacity. It can also help the business to determine how much and when to increase capacity.
Operational Engine is an abstraction of the system of operations management decisions about utilizing the operations systems to efficiently manage the organization's operational value chain. The operations engine is comprised of the system of processes that produce goods and services delivered to customers.
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Operational control decisions involve determining which organization units will carry out the tasks, establishing criteria for completion, resource utilization, and evaluating outputs.
Operational Engine Visualization
Analyzing Operational Engine performance and effective capacity based on process simulation techniques to provide information on resource utilization (labor and equipment and storage), production process performance in delivering products and/or services to customers that informs management decisions on optimum effective capacity for an Operations System configuration for a given product-mix.
The Operational Engine production process refers to any activity or group of activities that take one or more inputs, transforms and adds value to them, and provides outputs for customers or clients. Typical simulation analyses focus on experiments to help understand impact of changes at:
- The resource level (e.g., what if the organization bought a faster check sorter?),
- The process structure level (e.g., what if the organization allowed existing customers to skip the credit check activity?), or
- The process context level (e.g., what if the customer demand increased dramatically because of marketing campaign?).
Process simulation provides participants, decision-makers, and stakeholders with understanding of interplay of process concepts and elements, and constraints, as well as insight into the influence on future performance (efficiency and effectiveness) of organization processes. The simulation experiment is driven by customer events and operations decisions and choices with respect to Operations System's configuration and system elements such as processes, labor, equipment, and facility such that the resulting competencies are aligned with and support the organization's mission.
Simulation and visualization of the utilization of Operations System for the different types of transformation i.e., manufacturing, transport, supply and service helps managers and key operations staff gain insight into the "real world" situations facing the company and the factors (i.e., changes in demand, changes in product-mix, etc.) that influence the capacity and resource utilization decisions relative to the different types of transformation i.e., manufacturing, transport, supply and service.
Operations System Visualization
Businesses typically have a mix of production of goods and services that collectively define the value proposition offered to customers. Decisions about the impact of product-mix on production capacity and performance are usually supported by analytical methods such as Linear Programming (LP). These decisions are usually made so that the market demand is met and the firm profit is maximized. However, the complexity, and the dynamic stochastic nature of real-world production and service delivery systems often lead to goods and service production effective capacity levels that are different from those determined by analytical methods. Analytical methods also have problems coping with the dynamic changes in the product-mix which usually require enhancing system parameters and/or reconfiguration of the operations systems.
Strategic Management Decisions
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Corporate Strategy Decisions
The focus of corporate strategy is on how to manage resources, risk and return across a firm to create comparative advantage as opposed to looking at competitive advantage in business strategy. Comparative advantage does not imply better products - goods and services; it only shows the firm can offer products with comparable quality to competitors at lower prices.
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Business and Competitive Strategy Decisions
Business strategy is a tool to help organizations define the methods and tactics (function actions) they need to take within their company to reach their business goals.
Some examples of business strategic options include:
A business strategy helps different functional departments work together, ensuring departmental decisions support the overall direction of the company. Without following business strategy such as any of the ones mentioned above, it becomes very difficult for firms to sustain competitive advantage in competitive industry. Business strategies act as a foundation for developing operations and functional strategies.
Operations Strategy Decisions
Strategic decisions in operations management are the decisions that are concerned with whole environment in which the firm operates, the entire resources and the people who form the company and the interface between the two.
One way of categorizing the various decisions that typically comprise an operations strategy is to consider those that are structural, in that they define the overall tangible shape and architecture (e.g., capacity, technology type) of the operation, and those that are infrastructural, in that they relate to the people, systems, and culture that tie together the operations activities.
Structural decisions:
Structural decisions define the overall tangible shape and architecture (e.g., capacity, technology type) of the operation. Structural elements decisions are grouped as capacity, location, integration/networking, and technology.
Infrastructure Decisions:
These are divided into four categories; planning & control, inventory management, capacity management, and supply chain management. Examples include:
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Visualizing Strategy and Strategic Management
Organization strategy can be visualized in terms of the following visualization model elements:
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Corporate Strategy Decisions
The focus of corporate strategy is on how to manage resources, risk and return across a firm to create comparative advantage as opposed to looking at competitive advantage in business strategy. Comparative advantage does not imply better products - goods and services; it only shows the firm can offer products with comparable quality to competitors at lower prices.
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Business and Competitive Strategy Decisions
Business strategy is a tool to help organizations define the methods and tactics (function actions) they need to take within their company to reach their business goals.
Some examples of business strategic options include:
- Product differentiation - This type of differentiation strategy may be based on innovative technology, pricing, features and design. Companies can differentiate their products by highlighting the fact that they have superior technology, features, pricing, or styling. With differentiation strategy, firms target to achieve market leadership.
- Improve customer experience - Customer experience refers to the sum of all interactions a customer has with a business, both pre and post sales. The customer experience strategy defines the actionable plans in place to deliver a positive, meaningful experience across those interactions.
- Pricing - When it comes to pricing strategy, businesses can differentiate either by keeping their prices low to attract more customers, or give the products aspiration value by pricing them beyond what most ordinary customers could afford.
- Cross-sell more products - Focus on selling additional products to the same customer.
- Improve customer retention - This strategy requires you to identify key tactics and projects to retain your customers.
- Grow sales from new products - This strategy involves introducing new products into the market and updated products that are able to keep up with trends. It requires the company to invest in research and development in order to constantly innovate.
- Technological advantage - Obtaining a technological advantage to achieve better sales, improved productivity or even market domination.
A business strategy helps different functional departments work together, ensuring departmental decisions support the overall direction of the company. Without following business strategy such as any of the ones mentioned above, it becomes very difficult for firms to sustain competitive advantage in competitive industry. Business strategies act as a foundation for developing operations and functional strategies.
Operations Strategy Decisions
Strategic decisions in operations management are the decisions that are concerned with whole environment in which the firm operates, the entire resources and the people who form the company and the interface between the two.
One way of categorizing the various decisions that typically comprise an operations strategy is to consider those that are structural, in that they define the overall tangible shape and architecture (e.g., capacity, technology type) of the operation, and those that are infrastructural, in that they relate to the people, systems, and culture that tie together the operations activities.
Structural decisions:
Structural decisions define the overall tangible shape and architecture (e.g., capacity, technology type) of the operation. Structural elements decisions are grouped as capacity, location, integration/networking, and technology.
- Location Strategy - This related to decisions as to how near the company and its products should be to the consumers, suppliers, and talent while taking into consideration costs, infrastructure, logistics, and government.
- Layout Strategy - This relates to integrating capacity needs, personnel levels, inventory requirements, and technology in order to ensure that material, people, and information efficiently flow through the company.
- Maintenance - It relates to decisions about the capacity of the company's facilities, production demands, and personnel that are necessary in order to maintain a reliable and stable production process.
- Forecasting and Capacity Planning - What does the short-term and long-term schedules look like? How much can we make in what period of time?
Infrastructure Decisions:
These are divided into four categories; planning & control, inventory management, capacity management, and supply chain management. Examples include:
- Process Capacity and Design - This defines how the product - good or service - is produced (i.e., the production processes utilized and the specific technology, quality, human resource, and capital investments that the management will undertake in order to determine majority of the company's basic cost structure.
- Product Design - This involves designing the products and services to be offered . For instance, product designs normally determine the lowest volume of costs and higher grade of quality as well as other features such as sustainability and human resources required.
- Quality Management - This defines the expected quality from the consumers view point as well as established policies and procedures that the company intends to adopt towards attaining such quality levels.
- Human Resources and Job Design - This relates to decisions on how to recruit, motivate and retain the staff with necessary skills and talents.
- Supply Chain Management - This relates to decisions on how to integrate supply chain into the company's operations and strategy It includes decisions on what will be purchased when it will be purchased, whom it will be purchased from and the conditions for such purchases. Procurement is the process of getting the goods and materials your company needs.
- Inventory Management - This relates to decisions about inventory ordering and holding, and how to optimize the process in order to ensure consumers' satisfaction, enhanced supplier capabilities and effective production schedule.
- Scheduling - This relates to the decisions on how to determine and implement both intermediate and short-term schedules that can be utilized effectively and efficiently by both the personnel and facilities in the course of meeting consumers' demands.
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Visualizing Strategy and Strategic Management
Organization strategy can be visualized in terms of the following visualization model elements:
- Expected outcomes and actual outcomes (performance) of the layered strategy hierarchy
- Organization structure and resources that supports the implementation and execution of the strategy
- Outcome goals and the progress towards achieving them defined by key success indicators/milestones.
- The gaps in the organizational and operations capabilities
- Strategic performance - Initiatives, programs, and projects
- Operational Performance - Production outputs, production capacity utilization, operations resource utilization.
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Operations Management
Operations management focuses on the control of the means - processes and resources - by which organizations create and deliver value. Operations management involves structured decision-making, concerned with how efficiently and effectively resources are utilized and how well operations units are performing. Operational Management decisions comprise: administrative and operational decisions; these decisions are focused on operational control of the organization's capacity to efficiently carry out the tasks set forth by strategic and middle management decisions and decision-makers. Operational decisions, unlike strategic decisions, are repetitive, routine and involve definite procedure for handling so they do not have to be treated each time as if they were new. Operational management takes place within the context of broad policies and objectives set out by strategic decision-making. Operational management focuses on how to best use the organizations production resources, capabilities and competencies to create and deliver value to customers.
Operations Management involves administrative and strategic decision-making processes focused on Operations Strategy development, Operations Systems design, operations process design and operations control systems design.
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Operations management focuses on the control of the means - processes and resources - by which organizations create and deliver value. Operations management involves structured decision-making, concerned with how efficiently and effectively resources are utilized and how well operations units are performing. Operational Management decisions comprise: administrative and operational decisions; these decisions are focused on operational control of the organization's capacity to efficiently carry out the tasks set forth by strategic and middle management decisions and decision-makers. Operational decisions, unlike strategic decisions, are repetitive, routine and involve definite procedure for handling so they do not have to be treated each time as if they were new. Operational management takes place within the context of broad policies and objectives set out by strategic decision-making. Operational management focuses on how to best use the organizations production resources, capabilities and competencies to create and deliver value to customers.
Operations Management involves administrative and strategic decision-making processes focused on Operations Strategy development, Operations Systems design, operations process design and operations control systems design.
- Operations Strategy design decisions are concerned with choices and commitment to organization operations infrastructure, operations structure design.
- Operations System for the organization's production unit - This is the joint configuration of resources and processes with the resulting competencies ...
- Tactical Decisions - Tactically, Operations Management focuses on utilizing the Operations System to carefully manage the processes and resources, of the organization to produce and distribute products and services to customers which in turn realize strategic decisions to capitalize on opportunities.
- Operational Control Decisions - Operational control decisions involve determining which organization units will carry out the tasks, establishing criteria for completion, resource utilization, and evaluating outputs. Operational decisions, unlike strategic decisions, are repetitive, routine and involve definite procedure for handling so they do not have to be treated each time as if they were new.
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Company Statements
The term company statements refers to a hierarchy of statements that describe and communicate management's vision, intentions and direction of an organization, The hierarchy of statements is comprised of Vision Statement, Mission Statement, Values statement, and strategy statements. The strategy statement in the fourth level in the hierarchy of company statements including mission, values and mission statements at the level 1 through level 3 respectively.
Strategy Statement
A strategy statement communicates yo0ur company's strategy to everyone within your startup. The strategy statement is the fourth level in a hierarchy of company statements. It is more concrete, practical, and unique than the mission, values, and vision statements which define the other three (3) levels of the hierarchy.
The strategy statement consists of three (3) components:
Defining the objective, scope, and competitive advantage requires trade-offs, which are fundamental to strategy. For example, if a company decides to pursue growth, it must accept that profitability will no be a priority. All three components must be expressed as clearly as possible. A well written strategy statement will help employees and the organization to understand their roles when executing the company's strategy.
Developing a strategy statement requires you to first create a great product strategy, then defining a strategy statement that captures the strategy's essence in a way that makes sense to everyone at the company. A product strategy is a high level plan describing what a business hopes to accomplish with its product and how it plans to do so. The strategy should answer key questions such as: who the product will serve (personas)? how it will benefit those personas, and the company's goals for the product throughout its life cycle.
Vision Statement
The vision statement is level 3 of the statement hierarchy; it usually describes some broad set of goals - what the organization aspires to look like in the future. Developing a vision requires senior management to develop carefully reasoned answer to the question: "what is our vision for the company - what are we trying to do and to become?" - This question pushes managers to consider what the company's business character is, and should be, and to develop a clear picture of where the company needs to be headed over the next 5-10 years.
Values Statement
The values statement is the level 2 of the statement hierarchy. It define the organization in terms of the principles and values the leaders will follow in carrying out the activities of the organization. Every organization has values, and these values should be coherent with the strategy. The Core Values are the strong enduring beliefs and principles that the company uses as foundation for its decisions; they determine how people will behave and how they think in carrying out their job functions. These values are shared by the Board and staff, strongly held and not easily changed. Values assessment involves looking into the personal values of the members of the organization, organization values, and the organization's operating philosophy. They are the essence of the company’s culture and expression of its “personality”.
Mission Statement
Mission statement is the level 1 of the statement hierarchy. It clarifies the long-term future direction of the company and its strategic intent. The mission statement describes the purpose and reason for the organization to exist. Based on this mission statement the firm will define its business strategic goals and objectives. Once s firm has set its strategic objectives, it then must turn to the question of how it will achieve them. This is a statement of what the organization seeks to do and to achieve for its stakeholders. Mission statement also have stated goals - what the organization aspires to be for its stakeholders.
A mission statement establishes the organization's future course and outlines who we are, what we do, and where the organization needs to be headed - in effect, setting the organization with a sense of purpose, providing long-term direction, and establishing a clear mission to be achieved. In stating what the organization hopes to achieve, it is necessary to state what it hopes to do with respect to its environment - external "systems" such as markets, industry, the economy, the community, and other social systems. In each case there are unique relationships to observe (e.g., with competitors, municipal leaders, congress, etc.).
The term company statements refers to a hierarchy of statements that describe and communicate management's vision, intentions and direction of an organization, The hierarchy of statements is comprised of Vision Statement, Mission Statement, Values statement, and strategy statements. The strategy statement in the fourth level in the hierarchy of company statements including mission, values and mission statements at the level 1 through level 3 respectively.
Strategy Statement
A strategy statement communicates yo0ur company's strategy to everyone within your startup. The strategy statement is the fourth level in a hierarchy of company statements. It is more concrete, practical, and unique than the mission, values, and vision statements which define the other three (3) levels of the hierarchy.
The strategy statement consists of three (3) components:
- Objective - This is the single specific objective that will drive the business over the next few years. This objective must me specific, measurable, and time-bound. It must be a single goal (i.e., growth, profitability, etc.), although subordinate goals may follow from it. This objective must not be confused with the mission, vision, and values.
- Scope - The company's scope encompasses three dimensions - the target customer opr offering, geographic location, and vertical integration (that is, whole product).
- Competitive advantage - This describes the logic of why you will succeed, how you differ, or what you are doing better than the competition. To define the competitive advantage: state the customer value proposition, and explain why customers should buy your product or service; Outline the unique activities, or complex combination of activities, that allow your company to deliver your customer value proposition; Create a business model canvas which connects the activities that deliver your company's competitive advantage to your customer value proposition.
Defining the objective, scope, and competitive advantage requires trade-offs, which are fundamental to strategy. For example, if a company decides to pursue growth, it must accept that profitability will no be a priority. All three components must be expressed as clearly as possible. A well written strategy statement will help employees and the organization to understand their roles when executing the company's strategy.
Developing a strategy statement requires you to first create a great product strategy, then defining a strategy statement that captures the strategy's essence in a way that makes sense to everyone at the company. A product strategy is a high level plan describing what a business hopes to accomplish with its product and how it plans to do so. The strategy should answer key questions such as: who the product will serve (personas)? how it will benefit those personas, and the company's goals for the product throughout its life cycle.
Vision Statement
The vision statement is level 3 of the statement hierarchy; it usually describes some broad set of goals - what the organization aspires to look like in the future. Developing a vision requires senior management to develop carefully reasoned answer to the question: "what is our vision for the company - what are we trying to do and to become?" - This question pushes managers to consider what the company's business character is, and should be, and to develop a clear picture of where the company needs to be headed over the next 5-10 years.
Values Statement
The values statement is the level 2 of the statement hierarchy. It define the organization in terms of the principles and values the leaders will follow in carrying out the activities of the organization. Every organization has values, and these values should be coherent with the strategy. The Core Values are the strong enduring beliefs and principles that the company uses as foundation for its decisions; they determine how people will behave and how they think in carrying out their job functions. These values are shared by the Board and staff, strongly held and not easily changed. Values assessment involves looking into the personal values of the members of the organization, organization values, and the organization's operating philosophy. They are the essence of the company’s culture and expression of its “personality”.
Mission Statement
Mission statement is the level 1 of the statement hierarchy. It clarifies the long-term future direction of the company and its strategic intent. The mission statement describes the purpose and reason for the organization to exist. Based on this mission statement the firm will define its business strategic goals and objectives. Once s firm has set its strategic objectives, it then must turn to the question of how it will achieve them. This is a statement of what the organization seeks to do and to achieve for its stakeholders. Mission statement also have stated goals - what the organization aspires to be for its stakeholders.
A mission statement establishes the organization's future course and outlines who we are, what we do, and where the organization needs to be headed - in effect, setting the organization with a sense of purpose, providing long-term direction, and establishing a clear mission to be achieved. In stating what the organization hopes to achieve, it is necessary to state what it hopes to do with respect to its environment - external "systems" such as markets, industry, the economy, the community, and other social systems. In each case there are unique relationships to observe (e.g., with competitors, municipal leaders, congress, etc.).
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