Strategic Planning
Mission and vision statements, core values and organisational goals have become defining forces in the formulation of organisational strategy.
To this end, some strategists note that mission and vision statements, core values and goals can offer options to a tedious work of organisational planning (Dobson, Starkey and Richards 10). This is because stakeholders look at organisations in terms of their mission and vision statements, core values and goals. These factors define the long-term purpose of a company with regard to its services and products.
Organisational strategies and objectives must support its vision and mission statements, core values, and goals. Vision and mission statements, core values, and goals should show the purpose of the firm in terms of the main business, principal values and aspirations. It should also show key stakeholders and principles of the code of conduct to guide employees on how to behave.
Therefore, we shall focus on these strategies when formulating vision and mission statements, core values and goal for Gulf Fertilizer. This is a start-up organisation that needs well-formulated statements to provide strategies that can radically transform it for the markets it serves. These are the mission and vision statements, core values and goals of Gulf Fertilizer.
Mission statement
Gulf Fertilizer is a global leader in the provision of fertilizer to farmers. We are a leading fertilizer company that combines various processes and technology to produce high quality fertilizer. There is no other company in the world that produces fertilizer to farmers the way we do by integrating technology and research.
Vision statement
Gulf Fertilizer is dedicated to providing the best quality fertilizer with the aim of value creation for farmers and quality performance of crops, and providing productive and sustainable farming in society at large.
Organisational goal
To provide the best fertilizer manufactured with the state-of-the-art technology and research.
Core values
- Proving the best quality natural and organic fertilizers available
- Delighting and satisfying customers through meeting their diverse needs
- Creating ongoing win-win partnerships with suppliers
- Caring about farmers and the environment
- Promoting the safety and health of farmers through education programmes on fertilizer handling and usages
Description of the organizational environment, both the internal functions and the external context
The internal environment an organisation reflects features within the organisation. These are resources, culture, strategies, competence, and behaviours among others. Some elements of the internal environment may relate to the management, whereas others affect the entire organisation.
Gulf Fertilizer is a progressive organisation that empowers its workforce to make decisions that drive business. Some elements of the internal environment of the company include the following.
Organisational Resources
These refer to the company’s human resources and other inputs that produce products through combinations of various processes.
Gulf Fertilizer needs resources like money, raw materials, facilities, knowledgeable workforce, and manpower in order to produce products for various markets. Gulf Fertilizer must ensure availability of products and meet the costs of these resources so as to ensure success of its goals, strategy, mission and vision.
Organisational Behaviour
These are behaviours within the organisation originating from forces and influences of management and workforce. They can influence usages of available resources. Gulf Fertilizer promotes functional behaviours to ensure that relevant departments get adequate resources.
Distinctive Competence
This is the strength the company has among its major rivals.
The company has distinctive competence in its core functional area like research and development, finance, human resources, and marketing systems. The company evaluates its strength in terms of skills and abilities that enable it to implement its core strategies.
Therefore, Gulf Fertilizer can address its weaknesses by investing its resources so as to achieve the strength necessary for implementation of strategies. The company can also change its mission so that the available skills and resources can support it (Roberts 49).
Functional Plans and Policies
The company strategy should serve its plans and business policies. Implementation of these plans and policies influence the effectiveness of strategic management. Functional plans and policies shall help Gulf Fertilizer in the following areas. First, plans and policies ensure that the company implement its strategic decisions across all departments.
Second, the company has capabilities to control processes in different areas of its operation. Third, functional plan and policies shall reduce time spent in decision-making processes as the organisation already has plans. It shall also help the organisation distribute its resources fairly in core areas that need them. Finally, there is coordination among all departments of the organisation.
The external environment entails all elements outside the company which have effects on growth its growth. The company has little or lack control over external environment elements. However, the organisation must monitor them and adapt accordingly. We shall focus on areas that have significant effects on Gulf Fertilizer.
Competition
Gulf Fertilizer shall face competition from well-established companies like FAUJI Fertilizer Company, Abu Dhabi Fertilizer Industries Company (ADFERT), Saudi Aramco, and Oman India Fertilizer Company (OMIFCO) among others. These industries have a regional presence, strong market relations, large in sizes, better facilities, and high skills.
Customers
Gulf Fertilizer shall directly supply its products to farmers. It will also set up distribution outlets in the region.
Global context
The company shall assume a regional context in the Gulf region and Middle East. Its expansion strategy shall focus on Africa, Asia, and the US.
Resources
The company shall rely on external resources such as efficient road networks in the UAE, logistic capabilities, power supply and manpower for its success.
Skilled Workers
The company shall utilise available and qualified labour pool in the production of its products especially in research and development of new products. It shall also observe changes in the labour market so as to adjust with shifts in the labour market. This shall prevent the company from losing qualified employees.
Raw Materials
Gulf Fertilizer shall avoid any disruption in the supply of raw materials to ensure its continuous operation. It shall also watch fluctuating costs of raw materials. This shall also include storage facilities, transport facilities and subcontract to other organisations.
Finance
The company shall rely on its initial investment of one billion dirham in driving its operation. Since Gulf Fertilizer is a start-up company, it has little avenues of raising capitals.
Technology
The company shall rely on technology for efficiency in its production. This shall also include technical tools in the production processes.
Laws and Regulations
Gulf Fertilizer shall apply good corporate governance and ensure effective implementation of the region’s laws and regulations. However, it shall also take into account costs associated with compliance especially in the environmental area.
Current organizational chart showing functional relationships and lines of communication
Management structure strengthens the culture of a company by providing foundations, showing planned relationships, communication line, and providing outline boundaries in which the firm’s activities take place. The management structure must accommodate all aspects of varied departments. However, it can ignore conflicting expectations of the constituents (Miner 147).
There are two main strategies of designing a company’s structure. These are mechanistic and organic structure approaches. Traditionally, structures depicted power delegations, authority relations, and communication lines among others. The mechanistic management structure provides a single line of reporting and communicating that employees follow rigidly.
Employees in similar horizontal structures have no power or authority over each other. On the other hand, the organic structure lacks rigid or fixed hierarchy. Workers can work together to finish a project, and then provide help in other areas. In addition, employees can also handle more than a single project at any given time. Workers can have a manager, many managers, or none at all.
In such situations, the firm expects its workforce to exercise self-leadership. Gulf Fertilizer shall adopt an organic management structure to ensure effective operation and coordination among departments. This structure shall also work best because the company is new. Below is the proposed management structure.
Breakdown of the organisational structure in terms of characteristics, size, line and staff components or administrative and operational components, and examples of differentiation in terms of vertical and horizontal components, integration, centralization, standardization, formalization and specialization
The organisational structure and related information depict the division and coordination of the work of the firm among various departments (Kazmi 25). This provides specific functions for every department among all functional areas of the organisation. Breakdown of the organisational structure is necessary so that processes and policies have clear coordination for maximum achievement of the core goals and strategies.
These strategies become functional strategies of the organisation. The firm can create them from its corporate and business strategies. It is necessary that the company aligns its strategy implementation with the capabilities of its resources (Griffin 78).
Organisational strategies work at different levels. However, a company must create congruence and coordination of all its different strategies. This is the importance of vertical and horizontal elements of strategies. These processes should create both vertical and horizontal fit for the company.
Vertical elements create a necessary definition of various functional strategies with regard to their capabilities within the functional area so as to enhance the strategic advantage of the company. Gulf Fertilizer functional strategies with the focus on both horizontal and vertical elements shall focus on the following key areas.
First, the company shall focus on strategic sales and marketing management. The aim of this strategy is to align marketing strategies of the firm alongside its core goals in order to achieve strategic advantage in the market.
Second, the company shall also focus on strategic, financial management in order to control costs of operation and maximise returns for shareholders. This is a key strategy that the company will use to achieve strategic advantage against its competitors.
Third, the company must also pay attention to its operations management. The company should align operations management with its business and organisational strategies so that it creates a competitive advantage.
Fourth, Gulf Fertilizer must also focus on recruiting and retaining the best talents in order to achieve success from its human resources capabilities. This implies that the company must focus on demographic shifts in the workforce and adjust its recruitment strategies.
Strategic management of human resources shall ensure that the company has recruited, retained and exploited its human resources for the overall strategic advantage of the company.
Fifth, the company must also manage its research and development strategies in order to create the best fertilizer for its customers. This is a crucial area in the success of the company. It ensures growth and survival the company. The company must introduce technology, facilities, and knowledge and skills that can facilitate this strategy.
Horizontal element of the company shall ensure integration of different operational activities within the company that produce products for customers. Thus, the company must ensure integration during implementation processes of operations management.
Centralization
The company shall operate with heads of departments that report to the director.
Standardization
The company shall learn to standardise its processes as it comes of age. In the beginning, there shall be limited standardisation of processes.
Formalization
The company shall not operate with formal written rules. However, it shall change its rules as it matures.
Specialization
Organic management structure allows employees to have overlapping roles and perform various tasks. However, this is likely to change as employees become specialists in their areas.
Estimate of the organizational life cycle in terms of where it has come from and where it is going and comment about short term objectives and longer range strategy
A start-up like Gulf Fertilizer must go through a life cycle like any other company. This implies that directors and other staff must perform all the necessary functions to keep the business running. However, the future survival of the organisation requires changes from these practices found in start-ups. Thus, the management must recognise processes that the firm is undergoing.
The management must understand issues that the company faces in its life cycle. This creates a sense of insight and provides opportunities on how management can respond to various issues the company faces during operation. As the organisation changes, it acquires new features different from the old ones. Daft provided a summary of an organisational life cycle upon which we define life cycle of Gulf Fertilizer (Daft 135).
Gulf Fertilizer Life Cycle. (Adapted from Daft, 1992)
Short-term Objectives
The short-term objectives of the company shall focus on the first year of its operation. The company shall focus on growth and expansion in terms of sales, finance, and market share.
The company shall also concentrate on employees and management of the company. The process shall involve recruiting top talents for the organisation. New employees shall also undergone training and take various responsibilities within the company.
Gulf Fertilizer must also focus on sales and income. However, this may change as people learn about its products. The company must consider prices, outputs, and demand within the region.
Long-term Strategies
Gulf Fertilizer shall focus on revenue growths as its core strategy. In order to achieve this goal, the company shall study the market, competition, customers buying behaviour, and provide new products to drive sales.
The organisation shall also focus on customer service. The company targets at least 95 percent of positive response from its regular customers. It will redesign customer service approach where necessary so as to ensure customers’ satisfaction.
Gulf Fertilizer shall also engage in employee appreciation and reward systems that ensure low staff attrition. This also aims at attracting creative inputs from employees.
The company shall also focus on community and the environment. Employees shall volunteer to support community projects and environmental conservation efforts in areas it operates.
Strategy Development
SWOT analysis
SWOT analysis shall offer Gulf Fertilizer advantages by identifying areas where it can focus and create a niche. At the same time, the company shall also understand the fertilizer industry in the Middle East and Gulf region. This process shall also enable the company to identify potential threats and formulate strategies to counteract them.
The PESTEL analysis
Economic factors
The globe financial crunch of 2008 and the euro crisis were the main economic factors that tested start-ups in the recent period. The prevailing economic conditions influenced how consumers, resellers, and other stakeholders in markets purchase products.
Some start-ups closed because their business systems could not sustain difficulties of the recession. However, the financial crisis may create opportunities for new investors with low operating costs. Gulf Fertilizer can take advantage and exploit the vacuum in markets.
The fluctuation of exchange rates also has huge potential of affecting the company’s earning and profits. The prevailing market factors are difficult to predict. Thus, the company should prepare for such eventualities in the market.
Political factors
These may entail taxes, regulations, political unrest in the Middle East and other related political factors. Gulf Fertilizer must operate within the regulations of Middle East and the Gulf region.
The unrest in the Middle East and the Arab spring are major factors that can cause instability in the company. The company must anticipate effects of such unrest before exploring new markets.
Social factors
The company shall engage in social responsibilities such as conserving the environment and supporting local communities’ initiatives. This shall create a favourable company’s image and enhance its relationship with customers. Such approaches have influence on consumers’ emotions, attitudes, opinions and interests regarding the company and its products.
The company must also avoid any negative publicity that may affect its operation. Thus, it must relate well with its customers, communities, suppliers, and other stakeholders in order to enhance it social image among competitions.
Technological factors
Gulf Fertilizer shall adopt technology in its core operation. The company must actively engage technology in research and development of its new products. Changes in technology shall ensure efficiency and low costs for the company. Technological advancements have changed the way companies conduct business. In fact, Gulf Fertilizer must adopt technology in all its operation and in dealing with external suppliers and relations.
Legal factors
Gulf Fertilizer must operate with the law of the fertilizer industry in the region so as to avoid expensive lawsuits that shall affect its profits. Therefore, it must avoid charges from regulators, customers, competitors, labour unions, environmentalists, and trade unions among other interested parties.
Environmental factors
Environmental factors shall also influence Gulf Fertilizer practices. Regulators are keen on the effects of fertilizer materials on the environment. As a result, the company must ensure compliance with the environmental requirements regarding its products in terms of chemical compositions and packaging. It must also minimise production of waste materials during manufacturing processes.
Protection of the environment has become the key sustainability approach among many manufacturing organisation. Therefore, Gulf Fertilizer must also adopt best practices in the industry when conducting its manufacturing processes.
Competition profile analysis
Fertilizer companies in the Gulf region and Middle East mainly engage in manufacturing or mixing of fertilizer materials from other sources. The fertilizer industry in the Gulf region grows at a high rate predicted to reach 7.5 percent per annum by 2016. As a result, fertilizer companies should embrace long-term strategies for sustainable growth.
Top fertilizer companies in the Gulf region and Middle East
Strategy map for Gulf Fertilizer showing the different perspective of it along with the cause-and-effect relationships between these different dimensions
The strategy map shows cause-and-effect relationships among various key performance indicators and overall goals of the company. Strategy maps originate from the Balanced Scorecard framework (Kaplan and Norton 64). It shows organisational performance through four key areas.
Analysis of cause-and-effect relationships in the strategy map breaks down a mission and a strategy to a point where we can identify key performance indicators (KPIs) and objectives as the organisation focuses on detailed and specific objectives.
However, in a case where various departments engage in promoting the mission and strategies, then KPIs build a chain that ensure the implementation of organisational, strategic goals and mission. KPIs show the relationship among key activities of the company.
For instance, Gulf Fertilizer shall recruit qualified employees and provide them with the necessary training. Highly qualified and trained staff shall improve internal processes of the business through developing quality products, and maximise use available resources to satisfy customers’ needs.
This has potential of creating customers’ loyalty. Loyal customers will come for repeat purchases thus, increase the company’s profitability and shareholders’ returns.
Strategy map adapted from Kaplan & Norton, 1996
Strategy Implementation
The balanced scorecard: common goals, targets, measures and course of actions along with the responsibility (or department in charge) for each and every perspective of the balanced scorecard
At the centre of developing the balanced scorecard are the vision and strategy of the organisation that focus on financial, customer, internal processes, and learning and growth aspects of the organisation.
Learning and growth
The HR department shall be responsible for recruiting and training new employees. It shall also ensure new employees learn culture of the company in order to contribute to the strategic goals of the company.
The main goal is to recruit qualified employees who can provide in core areas of the organisation such as sales and marketing, finance department, customer service and operation where the KPIs shall focus. At the same time, recruits must also show considerable knowledge in technology.
Internal process
Various heads of departments must know how the organisation is performing in all areas of the business such as customer service, product developments, and financial performance among others. The metrics in this area must note how every department is contributing to the overall performance of the company.
Customer perspective
Customer focus and satisfaction have become key factors in business success. Customers are likely to find other suppliers if they receive poor services from a company. The metric should focus on repeat customers, levels of satisfaction with products and services, and attraction and retention of new customers. All employees must spearhead customer service.
Financial perspective
Financial performance of an organisation remains crucial to its survival. The financial department should provide timely and accurate financial information to show progress the company makes. The department must also focus on risks and cost-benefit analyses for ensuring healthy reporting.
Strategy Evaluation
A brief plan of controlling the implementation of the strategy and the balanced scorecard
Specific strategies
This focuses on measuring performance. Gulf Fertilizer must identify most important objectives relating to achieving excellence in customer service, financial performance, products and services, recruitment and retention of best talents.
The company shall also focus on factors that drive results such as employee commitment, technology, customer service, and motivating workforce. At this stage, the focus is also on workforce diversity, leadership, training, company values and their effects on performance (Schiemann 207).
The company should perform interview to determine the effectiveness of its strategy, align the team with strategy and identify factors that hinder improvement. This process should result into an action plan for evaluating the balanced scorecard.
The balanced scorecard shall help the organisation focus on certain strategy, communicate it to the team, align the team with strategy and make the strategy part of decision-making.
Evaluating current measures
The assessment reviews current measures against strategies. At the same time, the stage involves reviewing employees’ performance against KPIs in financial performance, customer satisfaction, recruitment and training, and operations management. This process also reviews the effectiveness of the KPIs in measuring performance of the organisation.
The aim of this step is to identify any shortcoming in the KPIs and areas of assessment in various departments.
Creating new focus areas and KPIs
The company creates new measures based on the effectiveness of the earlier measures. The process of creating new measures may involve conducting a survey that predicts the outcome in the main business areas. These areas may cover recruitment and selection processes. This should be flexible to meet human resource needs of the company. At the same time, the process must also indicate continuity in training processes.
The process should also review employees’ commitment, customer commitment, retention, loyalty, employee participation, clarity of objectives, customer focus, organisational innovation and adaptability and how they influence performance.
This process should create refined assessment tools that can work for the company for long time in predicting outcomes in different situations.
Using new balanced scorecard KPIs
The company should use tools that are easy to implement, understand, and measure. The performance metric for various areas should be flexible to reflect set targets and deliverables for evaluation purposes.
Analysis and recommendation
Analyses of the strategic approach are necessary for creating effective report and recommendations. The company can perform analyses in areas related to core business strategies. These should help the company identify the link between its processes and the actual outcomes.
The focus should be on employee productivity, financial performance, customers’ satisfaction, and employees’ retention. The process should aid the organisation in identification of factors that have the significant influence on performance.
The process should also provide opportunities of getting insight of returns on investment in terms of profitability, customer repeat purchase, and other areas that measure activities of key stakeholders.
The organisation should also use the report for comparison purposes against the industry key players. Such comparisons are useful in setting realistic targets best on what best performers have attained.
From the recommendations, the company should implement improvement plans from the senior level with clear priorities, deadlines, and performance targets. This process makes use of the balanced scorecard on a daily routine.
The organisation must also track improvement of the implemented recommendations. This helps in identification of emerging issues and formulating their strategies. Finally, the organisation must engage in continuous improvement by using the balanced scorecard to reset goals so as to create long-term competitive advantage.
Works Cited
Daft, Richard. Organizational Theory and Design. St. Paul, Minnesota: West Publishing, 1992. Print.
Dobson, Paul, Kenneth Starkey and John Richards. Strategic Management. Oxford: Blackwell Publishing, 2004. Print.
Griffin, Ricky. Management. 7th ed. London: Houghton Mifflin Harcourt, 2002. Print.
Kaplan, Robert and David Norton. The Balanced Scorecard: Translating Strategy into Action. Boston: Harvard Business Review Press, 1996. Print.
Kazmi, Azhar. Business Policy and Strategic Management. New Delhi: Tata McGraw Hill, 2004. Print.
Miner, John. Organizational behavior I: Essential theories of motivation and leadership. New York: M.E. Sharpe, 2005. Print.
Roberts, John. The Modern Firm: Organizational Design for Performance and Growth. Oxford: Oxford University Press, 2007. Print.
Schiemann, William. Creating the Measurement-Managed Organization. Branchburg, NJ: Metrus Group, Inc, 2002. Print.