2. Management Principles and Corporate Vision
Companies needs to proactively approach the market based on Corporate Vision and Management Principles. This is one of the key components of Strategic Management
. Corporate Vision and Management Principles are the bible of each company to exist in the market. They do not change based on external business environment. Every company aims to gain profit to exist eternity. On the other hand, universal reason for companies to execute business in the market is not just for financial profit but also for the contribution to society. Therefore it is important that your Corporate Strategies aligns with your Management Principles and Corporate Vision.
What is Corporate Vision?
Corporate Vision is also called Mission Statement. Corporate Vision is to describe the future state of the company, direction and focus of the business. It includes mid-term to long-term business goals to support which market the company will focus. Companies will allocate resources to the focus business domain. For example, IBM’s Corporate Vision is to lead in the invention, development and manufacture of the industry’s most advanced information technologies. Therefore the business strategies can change from selling personal computers to delivering technical outsourcing services. On the other hand, Corporate Vision has never changed that leads the industry in technology to satisfy the customer in the best way they can. It describes the higher intention of companies business, so “How” can be different depending on circumstances.
What is Management Principles?
Management Principles is the description of the how the company should be directed towards action and decision making process, sense of values to execute the business, and the ultimate definition of why the organization exists. This becomes the guidance of the employees to work in the organization. Clear Management Principles allows all the employees who work for the organization to also establish the culture of bring the values to corporate activities.
Relationship Between Management Principles, Corporate Vision and Strategic Management
Management Principles and Corporate Vision is the backbone of Strategic Management
. Therefore, Corporate Strategies must consider the purpose of why the organization exists. It also needs to consider core values that the corporate delivers to the market. At the same time Corporate Strategies describes the direction of the business. At the same time, it also describes how each individuals should work in the organization.
What is Corporate Identity?
Corporate Identity is the integration of the corporate image based on the Management Principles. For example, designing corporate name and logos, standardizing brand colors are part of Corporate Identity activities. In addition, Corporate Identity is not only for external parties to visualize the corporate image of the company but also to build common quality and culture among the employees working for the organization. Executives spend large amount of effort to establish the Corporate Identity in order to expand their business.
Summary of This Topic
Management Principles and Corporate Visions are used to communicate externally and internally regarding the purpose of your business. It is the bible for business owners to show the reason why your company performs the business. Management Principles forms the culture of the company, and that culture delivers the value which at the end is to contribute to the society. Corporate Vision is the direction of your business and how you utilize your strength to grow your business in the market. Each of the Business Strategy can change due to external environment but the Corporate Vision should not change because it is the high level intention and direction of your business.
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