Why Direction Changes
The business environment is always changing. To stay relevant and competitive, a business may need to adjust its vision, mission and objectives. These changes can be triggered by internal factors (within the company's control) and external factors (beyond its control).
External Factors
- Technology: New technology such as e-commerce forces companies to shift their mission toward digital.
- Competition: The arrival of new rivals can push a company to set more aggressive objectives.
- Economic conditions: A recession or inflation changes sales and profit targets.
- Government policy and law: New rules, for example on the environment, can change a company's objectives.
- Customer tastes: Changing customer demand forces a company to adjust its products and direction.
Internal Factors
- Business growth: As a company grows, its vision may widen from local to regional.
- Change in leadership or ownership: A new leader may bring a new direction.
Example
A traditional bookshop finds that more and more customers buy online. It therefore changes its mission to also offer an e-commerce platform and sets a new objective of 40% of sales through the website within two years. Technology change and shifting customer tastes triggered this change of direction.
Remember
Changing the vision, mission and objectives is a healthy response to the environment, not a sign of failure. A company that refuses to change risks being left behind.
Globalisation and Sustainability
Two further factors of growing importance are globalisation, which opens new markets abroad, and awareness of sustainable development, which pushes companies to include environmental goals in their direction. In short, changes to the vision, mission and objectives arise from a mix of internal and external factors that must be watched continuously.