Strategic Management Mission

Aim, Objectives & Stakeholders

The Strategic Management

Process

Mission and objectives identification

Analysis of business environment
Internal business audit
Review of Strategic Opportunities
Comparison of Strategic Options
Implementation of Strategy

The Lynch (2000) Polygon

The Business Idea

Strategic Direction
Identifying the Organisations purpose,
aims, objectives and goals

Key Issues:
2)The Interested Parties
3)The Method of Communication
1)The Message

The Message:
Why does the firm exist?
What is its aim and objectives?
How will it achieve these?
What strategies?

How will its performance be measured?

Which benchmarks?

The Method of
Communicating the purpose
of the firm
Mission and Vision Statements
A visionary statement concerning the (long
term) future direction of the firms, its
products, markets and values.
Essential purpose of the organisation

Mission Statements
Mixed reception:
Smoke and mirrors (Barkhus et al (2000)
Building blocks, invisible hand (Strong
1997)
Motherhood statements, the hippocratic or
hypocritical oath, lantern, anchor,
conscience, office manifesto, company
slogan, motto, (Fletcher 2001)
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1. Mission
An overriding purpose in line with the values and expectations of
stakeholders .
Johnson & Scholes
Personal example: Be healthy and fit.

2. Vision (or strategic intent)

A strong aspiration; Desired future state
An aspiration around which to focus the attention and energies of
members of the organization
Helps thinks creatively about how to prepare a company for the future
Personal example: To run the London marathon
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3. Aim
A broadly-worded, general statement of goal or purpose.
Personal example: To lose weight and gain muscle .

4. Strategic Objective
A quantification of that goal.
Personal example: To lose 10 kg .

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Mission Statements
Often summarises the firms reason for existing
The starting point for recognising the future
direction of the firm and therefore the required
strategic developments.
Should be:
Simple, Easily Remembered, Impactful
Positive, visionary & motivating

Should outline
Firms role
What it wishes to achieve
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Four Elements in the

Mission Statement [1]
Adapted from the Ashridge School (1991)
1)Purpose
Why the firm exists and what it exists to do.
What would happen if the firm did not exist?

2)Strategy
How the firm will achieve its aspirations.

What is it offering?
To whom?
Why should people buy it?
What are its competitive advantages?
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Four Elements in the

Mission Statement [2]
3)Values
What the firm believes in
Why the world will better if the firm succeeds?

4)Behaviour standards
The routines, procedures and policies the firm adopt to fulfil
its values
What is the firm willing to do/not do in order to succeed?
How low will it go?

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Some Mission Statements

Disneyland Paris: To turn the dreams of the young and
young at heart into reality

TUI Nordic: Most satisfied customers and best profitabilty

in the business

Hilton International: To always exceed customer

expectations by

delivering quality service through exceptional teamwork"

McDonald's Corporation: Quality food products;

efficient,
friendly service; and restaurants renowned
for the cleanliness and value they provide (Sufi & Lyons 2003)

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Some More
Otis: To provide any customers means of moving people and things up,
down, and sideways over short distances with higher reliability than any
similar enterprise in the world
Avis: Our mission is total customer satisfaction
BA: Be the best and most successful company in the airline business
Easyjet:To provide our customers with safe, low-cost, good value, pointto-point air services. To offer a consistent and reliable product at fares
appealing to leisure and business markets from our bases to a range of
domestic and European destinations. To achieve this we will develop our
people and establish lasting partnerships with our suppliers
Kodak: To be the worlds best in chemical and electronic imaging
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Shangri la Hotels

Our Vision
The first choice for customers, employees, shareholders and business
partners
Our Mission
Delighting customers each and every time
Our Guiding Principles (Core Values)
We will ensure leadership drives for results.
We will make customer loyalty a key driver of our business.
We will enable decision making at customer contact point.
We will be committed to the financial success
of our own unit and of our company.
We will create an environment where our colleagues
may achieve their personal and career goals.
We will demonstrate honesty, care and integrity
in all our relationships.
We will ensure our policies and processes are customer
and employee friendly.
We will be environmentally conscientious and provide
safety and security for our customers and our colleagues.
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Some Visions
Tui Nordic = Making holiday dreams
come true
Nike (1960s): Crush Adidas
Giro Sport Design (1986): Become the Nike of
the cycling industry

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Organisational Objectives [1]

Is an organisation a single period profit maximiser?

Johnson & Scholes

An organisation's objectives tend to emerge as the
wishes of the most dominant coalition.

based on R M Cyert & J G March's 'Behavioral Theory

of the Firm' (1996)

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Organisational Objectives [2]

Generally SMART:

Specific
Measurable
Achievable
Realistic
Timely

Consistent with the Mission and Aim.

One direction, avoid dissonance!!!

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Objectives - Examples

A larger market share

Quicker design-to-market times than rivals
Higher product quality than rivals
Lower costs relative to key competitors
Broader / more attractive product line than rivals
A stronger reputation with customers than rivals
Superior customer service
Recognition as a leader in technology and/or product
innovation
Wider geographic coverage than rivals
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Objectives - Financial

Increased growth in revenues / earnings/ dividends per

share
Wider profit margins
Attractive ROI
Strong credit ratings
Positive cash flows
Recognition as a blue chip company
Stable earnings during periods of recession
A more diversified revenue base
A rising stock price
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Some Statements of
Objectives
McDonalds: To achieve 100% total customer satisfaction
everyday in every restaurant, for every customer
To provide our shareholders with superior returns by achieving
double-digit annual earnings per share growth, increasing
dividends consistent with earnings growth, repurchasing
shares when the opportunity is right, pursuing profitable
international beer expansions, and generating quality
earnings and cash flow returns
To become the most competitive enterprise in the world by
being No.1 or No.2 in market share in every business the
company is in
30% of the companys sales must come from products fewer
than 4 years old
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Interest Groups
S h a r e h o ld e r s /
B o a rd
S e n io r
M anagem ent

G o v e rn m e n t /
P r o fe s s io n a l
a s s o c ia tio n s

M id d le M a n a g e r s
/ O p e r a tin g C o r e

In te re s t G ro u p s

T e c h n o s tru c tu re
/ S u p p o rt s ta ff

C u s to m e rs /
C o m p e tito rs

S u p p lie r s
C o n tra c t S ta ff /
S p e c ia l In te re s t
G ro u p s

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Stakeholders
Definition:
Stakeholders are groups or individuals
who have a stake in, or expectation of, the
organisations performance .....
Johnson ,Scholes & Whittington
Exploring Corporate
Strategy
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Frames of Reference
Functional/
divisional

Professional
(or
institutional)

National
(or regional)

Organisational
The
individual

Industrial/
sector
(recipe)

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Stakeholder Mapping:
Power/ Predictability
LOW

Few
Problems

Power
HIGH

Powerful
but
Predictable
HIGH

Unpredictable
but
Manageable
Greatest
Danger or
Opportunities

Predictabilit
y

LOW
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JUDGEMENTS on
Stakeholder
Power/Predictability Matrix
Likelihood of each stakeholder group impressing
their expectations
Whether they have the means to impress:
Power of Stakeholder
Effect of stakeholder expectations on future
strategies....
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Stakeholder Mapping: Power/

Interest

LOW

Minimal
Effort

Keep
Informed

Keep
Satisfied

Key
Players

Power
HIGH

LOW

Levels of Interest

HIGH
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Sub-group
EMPLOYEES

SHAREHOLDERS
LOAN FINANCIERS
SOCIETY
MANAGERS

CONSUMERS

Possible objectives
Higher wages
Job satisfaction
Security of employment
Better working conditions
Dividends
Capital growth
Interest
Prompt repayment of loan
instalments
No pollution
Clean image
No unsavoury relations
Status
Power
Perks
Challenging tasks
Opportunities for development
Safe, affordable product
Quality Service
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Conclusion
Direction priorities will be influenced by key stakeholders
May vary depending on size and complexity of
organisations
Small lifestyle businesses may not seek growth
Large complex organisations must be accountable to
external owners/shareholders
Corporate social responsibility may be a factor in
shaping direction
Managerialism which focuses on return on capital
employed/ investment dominates, it is a legal obligation
to meet needs of shareholders
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References
Bartkus B, Glassman m,& McAfee (2000)
Mission statements are they smoke and
mirrors, Business horizons, Nov./Dec
Fletcher W (2001) Hypocritical oath or
mission impossible, The Times 19 January
Raynor ME (1998), The vision thing, do we
need it, Long Range Plasnning Vol 31, No.3
pp 368-376
Sufi T & Lyons H(2003) Mission statements
exposed, International Journal of
Contemporary Hospitality management,
Emerald, 15/5 pp 255-262

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