Chapter 2 The Business Mission

Strategic Management: Concepts and Cases. 9th edition Fred R. David

PowerPoint Slides by Anthony F. Chelte Western New England College
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Chapter Outline
What Do We Want to Become?

What Is Our Business? Importance of Vision and Mission Statements

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Chapter Outline
Characteristics of a Mission Statement

Components of a Mission Statement

Writing and Evaluating Mission Statements
Ch. 2-3

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Vision & Mission

Vision is the art of seeing things invisible -- Jonathan Swift The very essence of leadership is that you have to have vision. You cant blow an uncertain trumpet. -- Theodore Hesburgh
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Vision

Management and executive agreement on the basic vision for which the firm strives to achieve in the long run is critically important.

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Vision
Vision statement answers the question:

What do we want to become?

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Vision
Clear vision
Provides foundation for comprehensive mission statement

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Vision & Mission

Vision statement developed first Short preferably one sentence Broad management involvement

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Vision Statements
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
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Vision Statements
The Bellevue Hospital is the LEADER in providing resources necessary to realize the communitys highest level of HEALTH throughout life.

--The Bellevue Hospital

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Vision Statements
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 being - every day! --Atlanta Web Printers, Inc.
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Vision Statements
It is the vision of the California Energy Commission for Californians to have energy choices that are affordable, reliable, diverse, safe, and environmentally acceptable. --California Energy Commission
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Mission Statements
Recent Data indicate that:
90% of all companies have used a mission statement sometime in the previous five years.

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Mission Statements
Mission statement answers the question:

What is our business?

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Ch. 2-14

Mission Statements
Mission Statement:
Enduring statement of purpose Distinguishes one organization from another in similar enterprises Declaration of an organizations reason for being
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Mission Statements
Mission Statements also referred to as:
Creed statement Statement of purpose Statement of philosophy Statement of business principles

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Ch. 2-16

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

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Mission Statements
Mission Statements
Essential for effectively establishing objectives and formulating strategies

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Vision and Mission

Many organizations develop both vision and mission statements Profit and vision are necessary to effectively motivate a workforce Shared vision creates a commonality of interests
Ch. 2-19

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Developing Vision & Mission

Clear mission is needed before alternative strategies can be formulated and implemented Important to have as broad range of participation as possible among managers in developing the mission
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Mission Statements
Mission Statement
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.

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Ch. 2-21

Mission Statements
The Mission of USGS is to serve the Nation by providing reliable scientific information to
Describe and understand the Earth; Minimize loss of life and property from natural disasters; Manage water, biological, energy, and mineral resources; and enhance and protect our quality of life.
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Mission Statements
It is the California Energy Commissions mission to assess, advocate, and act through improve energy systems that promote a strong economy and a healthy environment.

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Importance of Mission
Unanimity of purpose within the organization Basis for allocating resources Establish organizational climate Focal point for direction Translate objectives into work structure Cost, time and performance parameters assessed and controlled

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Mission Characteristics
Effective mission statements: Broad in scope Generate range of feasible strategic alternatives Not excessively specific Reconcile interests among diverse stakeholders Finely balanced between specificity & generality
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Mission Characteristics
Effective mission statements:
Arouse positive feelings and emotions Motivate readers to action Generate the impression that firm is successful, has direction, and is worthy of time, support, and investment
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Mission Characteristics
Effective mission statements:
Reflect judgments re: future growth Provide criteria for selecting strategies Basis for generating & screening strategic options Are dynamic in orientation
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Customer Orientation
According to Vern McGinnis, mission should:
Define what the organization is Define what the organization aspires to be Limited to exclude some ventures Broad enough to allow for creative growth Distinguish the firm from all others Serve as framework to evaluate current activities Stated clearly so that it is understood by all
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Customer Orientation
A good mission statement reflects the anticipations of customers. Identify customer needs Provide product/service to satisfy needs
AT&Ts mission focuses on communications, not telephones Exxons mission focuses on energy, not on oil and gas
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Social Policy & Mission

Managerial philosophy and thinking at the highest levels in the organization reflect social policy.
Affects development of vision & mission Responsibilities to consumers, environmentalists, minorities, communities, & other groups
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Social Policy & Mission

Social policy should be integrated in all strategic-management activities.
Mission statement is an effective instrument for conveying the social responsibility of the firm.

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Ch. 2-31

Components of Mission
Mission statements vary in
Length Content Format Specificity

Must include the 9 elements, as the mission statement is the most public and visible part of the strategic-management process.
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Mission Components
1. 2. 3. 4. 5. 6. 7. 8. 9. Customers Products or services Markets Technology Survival, growth, and profitability Philosophy Self-concept Concern for public image Concern for employees
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Components of Mission
Components of mission and corresponding questions to be answered: Customers:
Who are the firms customers?

Products or services:
What are the firm's major products or services?
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Components of Mission
Markets:
Geographically, where does the firm compete?

Technology:
Is the firm technologically current?

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Ch. 2-35

Components of Mission
Concern for survival, growth, and profitability:
Is the firm committed to growth and financial soundness?

Philosophy:
What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
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Components of Mission
Self-concept:
What is the firms distinctive competence or major competitive advantage?

Concern for public image:

Is the firm responsive to social, community, and environmental concerns?

Concern for employees:

Are employees a valuable asset of the firm?
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Importance of Vision & Mission

Although research results are mixed, firms with formal mission statements
2X average return on shareholders equity Positive relationship to organizational performance 30% higher return on certain financial measures

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Ch. 2-38

PepsiCo Mission Statement

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 Statement

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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Evaluation Matrix of Mission Statements

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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Evaluation Matrix of Mission Statements

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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Key Terms & Concepts

Concern for Employees Concern for Public Image Concern for Survival, Growth, and Profitability Creed Statement
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Key Terms & Concepts

Customers Markets Mission Statement Components

Philosophy
Ch. 2-44

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Key Terms & Concepts

Self-Concept Social Policy Stakeholders

Vision Statement
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