Chapter 2
The Business Vision & Mission
Strategic Management:
Concepts & Cases
10th Edition
Fred David
PowerPoint Slides by
Va Siheng, MBA.
National University of Management
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Chapter Outline
• Value
• Vision statement
• Mission statement
• Goal and objective
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“Management’s job is not to
see the company as it
is….but as it can become.”
John W. Teets
“Quote”
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I-Corporate Values
• Corporate values are the underlying
principles which guide and also drive the
actions and activities of individual
companies.
– A set of principles that further clarifying
what we stand for.
– A compass for individual and collective
behavior.
– A clarification of what we are prepared to
be judged on by audiences.
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I-Corporate Values
Each company or organization has their
own set of values.
• “Heart and Soul” of the organization
– Performance
– Reputation
• Endure throughout the life of the
organization.
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Developing a Corporate Values
• Question: What values or beliefs do
you want to represent your company?
• Facilitator selected top managers
and key personnel to complete
values form.
• Brainstorming Exercise
• Final agreement by consensus on
the best values to represent
company.
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VALUES SELECTION FORM
Accountability Innovation Social
Responsibility
Commitment Leadership Speed
Creativity Loyalty Teamwork
Customer Service Multi-Cultural Technology
Dependability Partnership Transparency
Equality Privacy Trust
Entrepreneurial Progressive Unique
Excellence Quality Other Values:
Freedom Reliability
Honesty Safety
Source: William Bean, Strategic Planning That Makes Things Happen, p. 101. 7
Important values
Customers
Management & Employees
Living values
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II- Vision statement
Agreement on the basic vision for which the
firm strives to achieve in the long run is
critically important to the firm’s success.
“What do we want to
become?”
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Vision & Mission
Clear Business
Vision
Comprehensive
Mission Statement
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Vision & Mission
Many organizations develop both vision &
mission statements.
Vision statement--
• Should be established first and foremost
• Short – preferably one sentence
• Broad management involvement
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Vision Statement Examples
National Pawnbrokers Association:
“The Vision of the National Pawnbrokers
Association is to have complete and
vibrant membership that enjoys a positive
public and political image and is the focal
organization of all pawn associations”.
-- National Pawnbrokers Association
(npa.ploygon.net)
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Vision Statement Examples
The Bellevue Hospital: “Is the LEADER
in providing resources necessary to
realize the community’s highest level of
HEALTH throughout life”.
-- U.S POULTRY & EGG Association
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III- Mission statement
-- 90% of all companies have used a mission
statement in the previous five years.
“What is our business?”
•Enduring statement of purpose
•Distinguishes one firm from another
•Declares the firm’s 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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Mission Statements
Reveal what an organization wants to
be and whom it wants to serve
Essential for effectively establishing
objectives and formulating strategies.
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Vision & Mission
Many organizations develop both vision &
mission statements.
It can be argued
that profit, not
mission or vision.
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Vision & Mission
Profit & vision are necessary to effectively
motivate a workforce
Shared Vision --
– Creates commonality of interests
– Reduce daily monotony
– Provides opportunity & challenge
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Developing Vision & Mission
Clear mission is needed before alternative
strategies can be formulated and
implemented
Participation from diverse
managers is important in
developing the mission.
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Developing Vision & Mission
Approach to developing --
– Select several articles about vision
or mission
– Read as background information
– Ask to prepare a draft statement
– A facilitator merge into document
– Request for modifications, Additions,
and deletions
– Revise the document
• Reach final agreement by consensus
on vision or mission of the company.
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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
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Mission Statement Examples
Microsoft: “Since its inception in 1975,
Microsoft’s mission has been to create
software for the personal computer that
empowers and enriches people in the
workplace, at school and at home.”
Coca-Cola: “As the world’s largest beverage
company, we refresh the world. We do this
by developing superior soft drinks, both
carbonated and non-carbonated, and
profitable non-alcoholic beverage systems
that create value for our company, our
bottling partners and our customers.”
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Importance of Mission
Benefits from a strong mission
Unanimity of Purpose
Resource Allocation
Mission
Organizational Climate
Focal point for work
structure
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Effective Missions
Broad
Broadin
inscope
scope
Generate
Generatestrategic
strategic
alternatives
alternatives
Not
Notoverly
overlyspecific
specific
Reconciles
Reconcilesinterests
interestsamong
among
diverse
diversestakeholders
stakeholders
Finely
Finelybalanced
balancedbetween
between
specificity
specificity&&generality
generality
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Effective Missions
Arouse
Arousepositive
positivefeelings
feelings&&
emotions
emotions
Motivate
Motivatereaders
readersto
toaction
action
Generate
Generatefavorable
favorable
impression
impressionof
ofthe
thefirm
firm
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Effective Missions
Reflect
Reflectfuture
futuregrowth
growth
Provide
Providecriteria
criteriafor
forstrategy
strategy
selection
selection
Basis
Basisfor
forgenerating
generating&&
evaluating
evaluatingstrategic
strategicoptions
options
Are
Aredynamic
dynamicin
innature
nature
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Mission & Customer
Orientation – Vern McGinnis
• Define what the organization is
• Define what it aspires to be
• Limited to exclude some ventures
• Broad enough to allow for growth
• Distinguishes firm from all others
• Stated clearly – understood by all
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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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Vision & Mission
Research results are mixed, however,
firms with formal mission statements --
• 2x average return on shareholder’s equity
• Positive relationship to company
performance
• 30% high return on certain financial
measures
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Products
Services Markets
Customers
Technology
Employees
Mission
Elements
Survival
Growth
Profit
Public
Image
Self-Concept Philosophy
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PepsiCo Mission
PepsiCo’s 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 & Jerry’s Mission
Ben & Jerry’s 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 community—local, national and international.
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Mission Statement Evaluation
Matrix
COMPONENTS
Concern
for
Survival,
Products Growth,
Organization Customers Services Markets Profitability Technology
PepsiCo Yes No No Yes No
Ben & Jerry's No Yes Yes Yes No
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Mission Statement Evaluation
Matrix
COMPONENTS
Self- Concern for Concern for
Organization Philosophy Concept Public Image Employees
PepsiCo Yes No No No
Ben & Jerry's No Yes Yes Yes
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THE AEROSPACE CORPORATION
-- VISION --
To be the world's leader in the application of space technology.
-- MISSION --
To apply our technical knowledge and expertise to enable our
customers to successfully exploit the full potential of space and
space technology.
-- VALUES --
Integrity - Technical Excellence - Objectivity
Dedication to Mission Success - Commitment to Our People.
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NORTHWEST AIRLINES
The VISION of Northwest Airlines : To build together the world's most
preferred airline with the best people; each committed to exceeding our
customers' expectations every day.
Our MISSION: The people of Northwest Airlines will provide reliable,
convenient and consistent air transportation that meets or exceeds
customer expectations and earns a sustainable profit.
Our VALUES: Northwest has eight essential values or standards that
Northwest people are expected to uphold.
Safety first
Honesty and integrity
Trustworthiness
Respect for self, others and for property
Caring
Resourcefulness and innovation
Commitment to profitability
Enthusiasm and camaraderie 36
Summary Values, Vision, Mission
• The reason for preparing Values, Vision
and Mission statements is to provide a
sense of purpose and direction for the
organization which is much greater than
simply making a profit.
• Once completed, these statements should
be shared with the company’s
management, employees and primary
customers.
• These statements should also serve to both
motivate and guide the actions of the
company’s managers and employees.
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IV-Goals and Objectives
• Goals and objectives are statements focusing
on “what” the company or organization
wants to do, accomplish or achieve.
• Strategies are the methods or actions
necessary to achieve or accomplish goals and
objectives.
• Goals and objectives can have:
Short-term range (1 year or less);
Intermediate term range (1 to 2 years);
Long-term range (2 to 5 years or more);
• Strategic goals/objectives have a long
term range.
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Goals & Objectives
• It is important to note that for some people,
goals and objectives are slightly different.
– Some people define “goals” as being
general statements (usually long-term) of
what a company wants to do or
accomplish, while defining “objectives” as
specific statements (usually short-term).
• We can therefore use the terms strategic
goals or strategic objectives in an
equivalent or interchangeable manner.
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Goals/Objectives should be
SMART
• Specific
• Measurable
• Attainable
• Results-Oriented
• Time-Limited
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Areas for Strategic Goals
1.19 Areas for Objectives
Areas in Which to
Set Objectives
• Profitability
• Efficiency
• Growth
• Shareholder wealth
• Utilization of resources
• Reputation
• Contributions to employees
• Contributions to society
• Market leadership
• Technological leadership
• Survival
• Personal needs of management
Prentice Hall, 2000 Chapter 1 19
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Benchmarking
• The benchmarking process can help to
facilitate the formulation of strategic goals
/objectives.
• Benchmarking is a process of identifying
best practices in specific areas in
organizations both within and outside of
an industry for the purpose of matching or
exceeding them.
• After monitoring the performance of
industry competitors and outsiders,
challenging strategic goals/objectives can
be set which seek to rival or surpass main
competitors in regards to key strategic
areas.
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Conclusion
• Strategic goals/objectives are not formulated
in isolation from the general environment.
• The internal and external audits, which are
the focus of the next lesson, have an impact
on the quantitative and qualitative aspects
of long term goals.
• In other words, strategic goals/objectives are
set and periodically revised in relation to the
firms existing strengths and weaknesses and
external opportunities and threats.
• Strategic management is very much a
dynamic process.
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