Information Sheet CBMEC 413 -3

ASSESSING ORGANIZATIONAL PERFORMANCE

Learning Objectives:
At the end of this module you must be able to understand and articulate answers
to the following questions:

1. What are organizational vision, mission, values, and goals, and why are they
important to organizations?

2. How should executives analyze the performance of their organization?

3. What is Business Ethics and its importance in Business?

4. Different Successful business ethics practices

The foundation of the strategic management is for an organization to answer three
questions:
1. Where are we?
2. Where are we going?
3. How are we going to get there?
Assessing the organization will lead to answer the first question, looking the
financial data, reviewing historical trends, and comparing the financial performance to
other benchmarks or competitor’s performance. Other organizational performance
indicators are included in the assessment like to quality measures, human resource
indicators, productivity measures, retention, customer satisfaction and the like.
Organizational leadership provides the answer to “Where are we going?” Leadership
sets the vision for the firm, in collaboration with organization’s stakeholders. The vision
is developed within the organization’s mission, its purpose for being.
For the third question, how are we going to get there, speaks to the heart of
strategic management. Toward achieving the organization’s vision, it develops
strategies. After much assessment is performed, strategies are developed to
determine the best road to advance the organization in the competition.
I. WHAT IS VISION?
“Vision animates, inspires, transforms purpose into action.” – Warren Bennis
A VISION is one key tool available to executives to inspire the people in an organization
An organization’s vision describes what the organization hopes to become in the future
and helps guide its strategies.
An organization’s vision describes what the organization hopes to become in the
future. Visions highlight the values and aspirations that lay at the heart of the
 organization. Although vision statements have the potential to inspire
employees, customers, and other stakeholders, vision statements are
relatively rare and good visions are even rarer.
The vision is what the organization aspires to be, that big goal it wants to
accomplish. Of course, the vision must also be aligned with the organization’s
core values, the principles that are essential as it carries out its mission and
vision.

The Big Picture: Examples of Organizational Vision

BPC envisions to become a lead provider of

quality and affordable technical-vocational,
entrepreneurial and technological
education, and a producer of highly
competent and productive human resource.
Avon: To be the company that best understands and satisfies the product,
service and self-fulfillment needs of women—globally.

KFC: To be leading integrated food services group in ASEAN region delivering

consistent quality products and excellent customer focused.

Apple: Man is the creator of change in this world. As such he should be above systems
and structures and not subordinate to them.

Characteristics of vision statements

Possibility > means the vision should entail innovative possibilities for dramatic
organizational improvements
Desirability > means the extent to which it draws upon shared organizational norms
and values about the way things should be done.
Actionability > means the ability of people to see in the vision, actions that they can
take that are relevant to them.
Articulation > means the vision has imagery that is powerful enough to be
communicated clearly a picture of where the organization is headed.

Prepared by: Mrs. Sarah Joy D. Martin

Strategic Management
CBMEC 423
 II. Mission Statements
A MISSION states the reasons for an organization’s existence, its purpose
Well-written mission statements effectively capture an organization’s
identity and provide answers to the fundamental question “Who are we?”
While a VISION looks to the future, a MISSION captures the key elements of
the organization’s past and present
A MISSION statement explains to key stakeholders why they should support
the organization
Avon Mission: We will build a unique portfolio of Beauty and related
brands, striving to surpass our competitor’s in quality, innovation, and
value and evaluation our image to become the Beauty Company most
women turn to worldwide”
KFC Mission: To maximize profitability, improve shareholder value and deliver
sustainable growth year after year.

Apple is committed to bringing the best personal computing experience to

students, educators, creative professionals and consumers around the world through
its innovative hardware, software and Internet offerings.

BPC’s Mission: 1. Equip students with the necessary technological and intellectual
capacity to face the fast changing demands of modern technology;
2. Develop the ideal working attitudes and values of the students;
3. Engage in research studies for innovative development of the school;
4. Provide industry-driven curricular programs;
5. Enhance the intellectual, moral and spiritual standard of the faculty and staff;
6.
Maintain
the quality
of its
learning facilities at
par with that of industry;
7. Sustain efforts towards effective administration
8. Strengthen linkages with the private and public sectors.

Prepared by: Mrs. Sarah Joy D. Martin

Strategic Management
CBMEC 423
Importance of mission statement:
“If you don’t set your goals based upon your Mission Statement, you may be climbing
the ladder of success only to realize, when you get to the top, you are on the wrong
building” - Stephen Covey
 It helps to ensure union of purpose within the organization;
Mission motivates everyone to work harder in order to achieve long-term success,
gives the right mindset to grow business in which all departments are involved in
the achievement of its sustainable growth.

 It provides a basis or standard for allocating organizational resources;

It helps to properly align the resources of an organization towards achieving a

successful future since everyone is responsible and accountable in the mission.

 It establishes a general tune or organizational climate;

Having a mission statement well aligned with the core values and fundamentals of
the firm is quite necessary as it also helps in shaping the work culture of the
organization.
 It serves as a focal point for individuals to identify with the organization’s
purpose and direction.
It provides direction that is to be followed by the whole organization. This helps to
align everyone within the organization, ensuring that everyone is working towards a
single purpose, leading to increase of efficiency and productivity in the
organization.
How can companies survive if it has no vision or mission statement? There will be no
goals and if there are no goals, no plans. The Vision and Mission statements are like
compass and destination of the organization respectively.

Characteristics of a mission statement

 Not lengthy
 Clearly articulated
 Broad, but not too general
 Inspiring
 Feeling and emotions
 Reflect the firm’s worth
 Relevant and Current

Prepared by: Mrs. Sarah Joy D. Martin

Strategic Management
CBMEC 423
  Unique and enduring
 Dynamic
 Basis for guidance
 Customer Orientation
 A declaration of Social policy
 Values, beliefs and philosophy

Components of Effective Mission Statement:

An effective mission statement should include nine components: 1) customers,
2? Products or services, 3) markets, 4) technology, 5) concern for survival,
growth and profitability, 6) philosophy, 7) self-concept 8) concern for public
image and 9) concern for employees

Formulation of mission statement:

There are many ways to formulate the mission statement. Here are the five stems to
write a great mission statement:
1. Ask why your company exists and what it values
 What’s the primary reason for existence of the company? What are its core
values, belief system, philosophy that provide to its customers, employees,
shareholders, community and even to the world?
2. Choose the works carefully
 Each word matters and to stand out in the competition industry, let the
voice, values and mission shine through. Avoid buzzwords and focus on the
core competencies.
Prepared by: Mrs. Sarah Joy D. Martin
Strategic Management
CBMEC 423
 3. Be ambitious
 A balance between realistic about what the organization does well and
what it’s working toward for the future will paint a roadmap for the team.
This will give an inspiration for everyone to work toward each full potential
each day.
4. Revise the mission statement when necessary
 Once the team’s organization has outlined the statement, it’s time to test
and even break it. Check what other employees, customers and even
friends think by showing it to as many people as to elicit feedback.
5. Live it
 When the team is satisfied and happy with the mission statement, turn the
statement from a collection of words into a tangible and inspiring mission
by living with it every day. Incorporate it in different ways like in the
company’s website, marketing materials, internal communications and
company-wide meetings to involve everyone in your business.
Below are other ways that the mission statement can be formulated.
 In many cases, the mission statement is inherited
 In some cases, the mission statement is drawn up by the CEO and BODs or a
committee of strategies constituted for the purpose;
 Engaging consultants for drawing up the mission statement is also common;
 Many companies hold brainstorming sessions of senior executives to develop a
mission statement
Evaluating mission statement
For a mission statement to be effective, it should meet the following conditions:
1. The Mission statement is clear and understandable to all parties involved.
2. The Mission statement is brief enough for most people to remember.
3. The Mission statement clearly specifies the purpose of the organization.

Pursuing the Vision and Mission through SMART Goals:

Employees are put in a good position to succeed to the extent that an organization’s
goals are SMART.
SMART is an acronym that can use to guide the organization’s goal setting. To ensure
that the company’s goals are clear and reachable, each one should be:
Specific – clear, simple, significant, sensible
The company’s goals should be clear and specific to be able to focus the efforts,
time and be motivated to achieve them.

Prepared by: Mrs. Sarah Joy D. Martin

Strategic Management
CBMEC 423
 Measurable – meaningful, motivating
Tracking the progress of the goals is very important and will keep the team
motivated. Assess the progress help the organization stay focused, meet the
deadlines and feel exited when getting closer to the goals achievement.
Achievable/Attainable – agreed
The goals need to be realistic and attainable to be successful. It should stretch
the abilities but remains possible. Try to seek opportunities and resources that
can help to bring them closer to the goals.
Relevant – realistic, reasonable, resourced, results-based
This step ensures that the companies goals matter to everyone and it also aligns
with other relevant goals.
Time bound – time based, timely
Every goal needs to have a target date, deadline to focus on and something to
work toward. A time-bound goal usually answers the question “when” and also
helps to prevent everyday tasks from taking priority over the long-term goals.
However, the SMART can be SMARTER which include the ER are in focused:
Evaluate – monitor and regular checking of the goals set
Reward – celebrate even small achievements to keep the team or organization
stay focused in achieving its long-term success and goals.

Creating SMART Goals

Goals are narrower aim that should provide clear and tangible guidance to employees.
SMART goals help provide clarity, transparency, and accountability
Let’s take a look of the Coca Cola’s SMART Goal as an example:

Coca-Cola aims to “improve our water efficiency by 20%, compared with a baseline
year.”

Prepared by: Mrs. Sarah Joy D. Martin

Strategic Management
CBMEC 423
Corporate Values: Value Statements:
It’s essential to illustrate what values an organization holds on. This will help them to
gain the support of the employees, suppliers, customers, investors and even the
community around them, because of the philosophy that the organization believes in.
Value statements are the management perspective about who is the company today
in comparison to who will be in the future. These are explicit principles that the
company endorses and lives by, and expects their employees to embrace. These are
statements on how they interact with the community around them, even to the
stakeholders who will be supporting them.
Values related to integrity, diversity, and customer service are often seen on company
websites. An information technology company might include innovation as one of its
values.
Importance of value statements:
 They demonstrate to their employees and other stakeholders the important
principles that the organization lives by
 Values show customers and potential customers what the firm stands for. Some
customers may choose a company based on how its values resonate with theirs.
 It creates social contract for the organization’s community which leads in
building a safe workplace, besides a community that can grow and succeed
together.
Examples of Different Values Statements from Various Companies:

Prepared by: Mrs. Sarah Joy D. Martin

Strategic Management
CBMEC 423
 IIII.
ASSESSING ORGANIZATIONAL PERFORMANCE
Assessing organizational performance is a vital aspect of strategic management.
Managers must know how well the organizations are performing to sense of what
strategic changes to make. Most organizations view their performance in terms of
effectiveness in attaining their Vision, Mission and goals. Some organizations see their
performance on the optimization of deploying their resources in terms of efficiency to
obtain the desired results.
Organizational performance refers to how well an organization is doing to reach its
vision, mission, and goals.
Two important considerations: [1] performance measures and [2] performance
benchmarks
(1)A performance measure is a metric by which an organization’s progress can be
gauged. Most executives examine measures such as profits, stock price, and
sales in an attempt to better understand how well their organizations are
competing in the market.
(2)A performance benchmark is used to make sense of an organization’s standing
compared to its own or a competitor’s financial measures and/or performance
indicators.
The use of different measures and benchmarks provides different information about
the organization’s functioning and with this, it is valuable. Some of the commonly used
measures are the accounting ratios, which are highly focused on the past, show
stakeholders the end-results of the past decisions but do little to project the future
performance of the company.
How Organizations and Individuals Can Use Financial Performance
Measures and Indicators

Prepared by: Mrs. Sarah Joy D. Martin

Strategic Management
CBMEC 423
 A. The Balanced Scorecard
This is a strategic planning framework that most of the companies used to assign
priority to their products, services and projects; communicates about their targets; and
plan their routine activities.
The Balanced Scorecard allows organizations to monitor and measure its strategies’
success to determine how well they have performed. This is anchored on 4
perspectives, financial, business processes, customer, and organizational capacity,
which show the drive strategy, business actions and the behavior of direct reports. The
scorecard enables entities to discover their shortcomings and come up with strategies
to overcome them.
Four (4) Perspectives of the Balanced Scorecard:
The following are the key areas that a balanced scorecard focuses on:
1. Financial Perspective- Under this perspective, the company’s goal is to make
sure that it earns a return an investment (ROI) made and key risks involved in
running the business are being managed. Satisfying the needs of all the business
players like the suppliers, customers and stakeholders is the measurement of the
goals’ achievement.

Steps to achieve such goals might include new services and products
introduction, company’s value proposition improvement, and cutting down on
the costs of doing the business to continually generate revenue.

2. Customer Perspective – Customer satisfaction is the company’s indicator of

success. How well a company exceeds its customers’ expectations can
extremely affect its profitability.
This monitors how the organization is providing value to its customers and
Prepared by: Mrs. Sarah Joy D. Martin
Strategic Management
CBMEC 423
 calculates the level of customer satisfaction with the company’s services or
products, percentage of repeat customers. This measure provide an idea to the
question, “How do customers see us?”

Strategies to achieve high customer satisfaction include the product or service

quality improvement, customer shopping experience enhancement, going extra
mile and prices adjustments.

3. Internal Business processes perspective – The Balanced Scorecard can help to

evaluate the company’s products or services and calculates whether they
conform to the standards that customers’ desire. This perspective is aiming to
answer the questions, “What are we good at? or “What must we excel at?”
To achieve the answer to these questions, the company can formulate marketing
strategies and keep on innovating new products and services not only to meet
customers’ expectations but to exceed them.

4. Organizational Capacity Perspective (Learning and Growth Measures) – The

employees of the organization are required to demonstrate high performance in
terms of their skills, competence, leadership, organization’s culture, knowledge
application, and others.

This is will help the organization to optimize its goals and objectives with
favorable and long – term results and lead to sustainability in the competition
advantage.

To achieve this goal, the company should use the latest high technology to
automate the activities and ensure a smooth flow of activities in the
organization. Also, skilled, trained, high caliber and competent employees is a
vital part to achieve this goal.

B. Measuring Performance Using the Triple Bottom Line

This triple bottom line emphasizes the three P’s: People, planet and traditional
organization profits. This notion was introduced in the early 1980s but did not
attract much attention until the late 1990s.This provides another tool to help the
top level management focus on the performance targets beyond profits alone.

The Triple Bottom Line covers the three parts:

 People – making sure that the actions of the organization are socially
responsible
 Planet – making sure organizations act in a way that promotes environmental
sustainability
 Profits – financial sustainability of the company and continues increasing of
the shareholders’ value

Prepared by: Mrs. Sarah Joy D. Martin

Strategic Management
CBMEC 423
 IV. BUSINESS ETHICS IN STRATEGIC MANAGEMENT

Business Ethics - A Successful way of conducting business

Business Ethics refers to carrying business as per self-acknowledged moral standards.
These are set of moral standards that are relied upon to make decisions and reach
conclusions.
It is actually a structure of moral principles and code of conduct applicable to a
business.
The main aim of business ethics is to provide people with the means for dealing with
the moral complications. Maintaining a high ethical standards will positively benefit the
business like:

a. Improve decision making – decisions are driven by values, beliefs and even
philosophies of the one’s life. Like in the organizations, if it doesn’t value competition,
it will savage in its operations, aims to wipe out competitors and establish a monopoly
in the market.
b. Utilization of Limited resources- the earth has growing population yet the resources
are finite. Without ethics, these resources are depleted for purely for self-interest at a
huge cost both to current and future generations.
c. Cost and risk reduction – organizations which recognize the importance of business
ethics will spend less to protect themselves from internal and external behavioral risks,
particularly when supported by sound governance-systems
d. Long-term growth, survival and success– smaller yet sustainable long-term profits is
much better than higher, riskier short-lived profits. When the organization will take into
account its stakeholders through its ethical long-term vision, sustainability will come.
Strategy and Ethics:
Ethics involves an idea of right and wrong; moral and immoral; fair and unfair
Business Ethics is the application of the general ethical standards and principles to
the actions and decisions of business organizations and its employees’ conduct.

The organizations must seriously consider ethics for its strategic planning and the
managers should regularly spent time to develop their organizational and functional
strategic plans, growth strategies with ethics and regulatory compliance.
The top level managers have a responsibility to attend the ethics of the organization
they lead and govern. It’s crucial to develop an ethics strategy and creates a system
that encourages and ensure moral behavior, develop individual and corporate
character, also, protect the organization from illegal or unethical activities.
List of some significant ethical principles:
Prepared by: Mrs. Sarah Joy D. Martin
Strategic Management
CBMEC 423
  Protect the basic rights of the employees/workers.
 Follow health, safety and environmental standards.
 Continuously improvise the products, operations and production facilities to
optimize the resource consumption
 Do not replicate the packaging style so as to mislead the consumers.
 Indulge in truthful and reliable advertising.
 Strictly adhere to the product safety standards.
 Accept new ideas. Encourage feedback from both employees as well as
customers.
 Present factual information. Maintain accurate and true business records.
 Treat everyone (employees, partners and customers) with respect and integrity.
 The mission and vision of the company should be very clear to it.
 Do not get engaged in business relationships that lead to conflicts of interest.
Discourage black marketing, corruption and hoarding.
 Meet all the commitments and obligations timely.
 Encourage free and open competition. Do not ruin competitors’ image by
fraudulent practices.
 The policies and procedures of the Company should be updated regularly.
 Maintain confidentiality of personal data and proprietary records held by the
company.
 Do not accept child labour, forced labour or any other human right abuses.

Prepared by: Mrs. Sarah Joy D. Martin

Strategic Management
CBMEC 423