Chapter 2 The Business Vision & Mission

Strategic Management: Concepts & Cases 11th Edition Fred David

Dr. Ayham Jaaron

Ch 2 -1

Chapter Outline
What do we want to become?

What is our business?

Importance of Vision and Mission Statements

Ch 2 -2

Chapter Outline (contd)

Characteristics of a mission statement

Components of a mission statement

Writing & evaluating mission statements

Ch 2 -3

Vision

The last thing IBM needs right now is a vision. (July 1993)

What IBM needs most right now is a vision. (March 1996)

-- Louis V. Gerstner, Jr., CEO, IBM Corporation
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Vision

Agreement on the basic vision for which the firm strives to achieve in the long run is critically important to the firms success.

Ch 2 -5

Vision

What do we want to become?

Example: A hospital vision: to be the leader in providing resources necessary to realize the communitys highest level of health throughout life.
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Vision

Clear Business Vision Comprehensive Mission Statement

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Vision

Vision should be formulated first and foremost. It should answer the basic question what do we want to become? Profit + vision= workforce motivator.

Clear vision provides basis for clear mission statement It should be short, preferably one sentence, developed collectively by managers.
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Vision

Shared Vision among managers-Creates commonality of interests Reduce daily monotony Provides opportunity & challenge

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Vision Statement Examples

A national organization which represents its members in all aspects of poultry on both a national and international level

-- U.S. Poultry & Egg Association

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Vision Statement Examples

The Vision of Manley Baptist Church is to be the people of God, on mission with God, motivated by a love for God, and a love for others

-- Manley Baptist Church

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Vision Statement Examples

The Vision of USGS is to be a world leader in the natural sciences through our scientific excellence and responsiveness to societys needs

-- U.S. Geological Survey (USGS)

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Vision Statement Examples

To be the first choice in the printed communications business. The first choice is the best choice, and being the best is what Atlanta Web pledges to work hard at beingevery day!

-- Atlanta Web Printers, Inc.

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Mission Statements

Mission answers the question: What is our business?

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Mission Statements

-- 90% of all companies have used a mission statement in the previous five years

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Mission Statements

Enduring statement of purpose

Distinguishes one firm from another
Declares the firms reason for being

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Mission Statements
Also referred to as:

Creed statement

Statement of purpose
Statement of philosophy Statement of business principles

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Ch 2 -18

Mission Statements

Reveal what an organization wants to be and whom it wants to serve

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Mission Statements

Essential for effectively establishing objectives and formulating strategies

Ch 2 -20

Vision versus Mission

Many organizations develop both vision & mission statements

Main difference is in the questions they answer

Ch 2 -21

Vision & Mission

Profit & vision are necessary to effectively motivate a workforce

Ch 2 -22

Vision & Mission

Shared vision creates a community of interests

Ch 2 -23

The Process of developing Mission statements

Clear mission is needed before alternative strategies can be formulated and implemented

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The process of developing Vision & Mission:

Participation from diverse managers is important in developing the mission

1)

First, ask managers to read articles about mission statements.

2)
3) 4) 5) 6)

Ask each manager to prepare a mission statement for the organization.

A facilitator/ committee leader merge all these statements into a single document. Distribute this document among managers. Ask managers to comment and modify on the document to a degree that each manager has inserted some input. A meeting is held to gain consensus and uniform shape for mission.

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Benefits of Mission formulation process:

The process of mission development is a very good tool to gain support from all managers for future strategies.

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Mission Statement Examples

It is the California Energy Commissions mission to assess, advocate, and act through public/private partnerships to improve energy systems that promote a strong economy and healthy environment.
-- California Energy Commission

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Mission Statement Examples

The Bellevue Hospital, with respect, compassion, integrity, and courage, honors the individuality and confidentiality of our patients, employees, and community, and is progressive in anticipating and providing future health care services.
-- The Bellevue Hospital

Ch 2 -28

Mission Statement Examples

John Deere has grown and prospered through a long-standing partnership with the worlds most productive farmers. Today, John Deere is a global company with several equipment operations and complementary service businesses. These businesses are closely interrelated, providing the company with significant growth opportunities and other synergistic benefits.
-- John Deere, Inc.
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Importance of Mission
Benefits from a strong mission
1)To ensure Unanimity of Purpose 2) To facilitate translation of objectives into a work structure 3)Resource Allocation 4) To specify firm purpose 5) Organizational Climate or tone 6) Focal point for work structure

Mission

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Effective Missions has the following characteristics

Broad in scope

Generate strategic alternatives

Not overly specific Reconciles interests among diverse stakeholders Finely balanced between specificity & generality

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Effective Missions

Arouse positive feelings & emotions

Motivate readers to action Generate favorable impression of the firm

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Effective Missions

Reflect future growth

Provide criteria for strategy selection Basis for generating & evaluating strategic options Are dynamic in nature

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Mission and Attitudes:

mission is more than a statement, it is a declaration of organizational attitudes and outlook.

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Mission & Customer Orientation

An Effective Mission Statement -

Anticipates customer needs Identifies customer needs Provides product/service to satisfy needs

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Social Policy & Mission

Social policy is the responsibility of the organization to customers, environment..etc. Managerial philosophy shapes social policy - Affects development of vision & mission

Responsibilities to

Consumers Environmentalists Minorities Communities

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Social Policy & Mission

Social policy should be integrated in all strategic-management activities Mission should convey the social responsibility of the firm

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Vision & Mission

Research results are mixed, however, firms with formal mission statements generally see a:

2x average return on shareholders equity Positive relationship to company performance 30% higher return on certain financial measures

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Customers

Products Services

Markets

Technology

Employees

Mission Elements
Survival Growth Profit Self-Concept Philosophy

Public Image

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PepsiCo Mission
PepsiCos mission is to increase the value of our shareholders investment. We do this through sales growth, cost controls, and wise investment resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity.

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Ben & Jerrys Mission

Ben & Jerrys mission is to make, distribute and sell the finest quality all-natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products. To operate the Company on a sound financial basis of profitable growth, increasing value for our shareholders, and creating career opportunities and financial rewards for our employees. To operate the Company in a way that actively recognizes the central role that business plays in the structure of society by initiating innovative ways to improve the quality of life of a broad communitylocal, national and international.
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Mission Statement Evaluation Matrix

COMPONENTS Concern for Survival, Growth, Profitability

Organization

Customers

Products Services

Markets

Technology

PepsiCo Ben & Jerry's

Yes No

No Yes

No Yes

Yes Yes

No No

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Mission Statement Evaluation Matrix

COMPONENTS

Organization

Philosophy

SelfConcept

Concern for Public Image

Concern for Employees

PepsiCo
Ben & Jerry's

Yes
No

No
Yes

No
Yes

No
Yes

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For Review (Chapter 2)

Key Terms & Concepts
Concern for Employees Customers

Concern for Public Image

Markets

Survival, Growth, & Profitability Creed Statement

Mission Statement Components Managerial Philosophy

Ch 2 -44

For Review (Chapter 2)

Key Terms & Concepts
Self Concept Stakeholders

Social Policy

Vision Statement

Ch 2 -45