SUMMARIZING CHAPTER TWO

THE BUSINESS VISION AND MISSION STATEMENT

Chapter Two aims at giving concepts and tool needed to evaluate and writ a sound vision and
mission Statement the organization. This will allow companies to come up with Vision and
mission Statements for either Large, Small, profit and non-profit making organization.
World’s economic problems has led to change of the business Vision and mission statements
of some companies for them to survive for example, in the Philippines, the largest food and
beverage company, San Miguel Corp., purchased Petron Corp., the country’s largest oil
refiner, Meralco, formally named Manila Electric in order to diversify its business.
Case Study
This Chapter will look at how Wal-Mart aimed at doing grate in the weak economy. In 2008
the world was in economic crisis but Wal-Mart increased its revenue by 30 billion and its net
income by 1.5billion through selling electronic product. And in 2009 the Company was
awarded the 11th most admired Company in the world by Fortune Magazine. The Company
expanded internationally by having Shops in India, Brazil from 2009 to 2013. Management
planned to invest 53% in international market from 33% in the next five years. Management
thought that this will be achieved by improving the already existing stores in the USA.
Capital Expenditure for 2010 increased from 4.8billion to 5.3billion. During the same time in
2008 other companies like Electronics retailer, Circuit City, Best Buy and Amazon were in
crisis as such some of them were declared bankruptcy. Wal-Mart was stable and opened
3,500stors in the USA and traded in most sophisticated electronic like Black Berry, Smart
phones, Blu-ray disc players and Dell in’s touch screen computers. Wal-Mart became popular
in USA, ASDA in UK where it had 7,870 stores including 890 discount stores, 2970
discounts and grocery Stores, 600 warehouses (Sam’s Club). Wal-Mart is number one retail
shops in Canada, Mexico and Asia and it owns 95% stake in Japan, SEIYU, Europe and
South America.
The Founder owns 40% of Wal-Mart. The Company has corporate leadership in
Sustainability as such in 2009the Company through it partner BP Solar installed roof solar
arrays on 20 stores and warehouse in California and Hawaii. BP also maintains the solar
system. The Company also developed environmental labelling to enable redefinition of
consumer products labelling processes by the year 2012.
Vision Statement
In the first place the managers and executive must establish a vision statement. Vision
Statement defines What the company wants to become on the market. Agreement on the
basic vision which the company strive to achieve in the long term should be determined.
Vision statement should be short.
Examples of vision statement; Tyson Foods’ vision is to be the world’s first choice for
protein solutions while maximizing shareholder value. This is a good statement, unless Tyson
provides non protein products; General Motors’ vision is to be the world leader in
transportation products and related services. PepsiCo’s responsibility is to continually
improve all aspects of the world in which we operate such as environment, social, economic
creating a better tomorrow than today; Dell’s vision is to create a company culture where
environmental excellence is second nature.
A clear business vision statement will help the team to derive a comprehensive mission
statement.
Mission Statement
Mission statement should define what the company’s business is. Mission Statements
answers the question ‘what is our business’ reveals what the organization wants to be and
whom to serve. Mission Statement has a purpose that may distinguish one organisation from
other similar enterprises or its competitors. Mission statement is a declaration of the
organisations’ reason for being. The mission Statement can also be called ‘a creed statement,
a statement of purpose, a statement of philosophy, or a statement of belief or a statement of
business principles or a statement of defining our business.
Examples of a mission statement;
Fleetwood Enterprises will lead the recreational vehicle and manufactured housing industries
in providing quality products, with a passion for customer-driven innovation. We will
emphasize training, embrace diversity and provide growth opportunities for our associates
and our dealers. We will lead our industries in the application of appropriate technologies.
We will operate at the highest levels of ethics and compliance with a focus on exemplary
corporate governance. We will deliver value to our shareholders, positive operating results
and industry-leading earning.
Dell’s mission is to be the most successful computer company in the world at delivering the
best customer experience in markets we serve. In doing so, Dell will meet customer
expectations of highest quality; leading technology; competitive pricing; individual and
company accountability; best-in-class service and support; flexible customization capability;
superior corporate citizenship; financial stability.
Procter & Gamble will provide branded products and services of superior quality and value
that improve the lives of the world’s consumers. As a result, consumers will reward us with
industry leadership in sales, profit, and value creation, allowing our people, our shareholders,
and the communities in which we live and work to prosper.
Benefits of Vision and Mission Statement
The great benefit can be achieved if an organisation systematically revisits their Vision and
Mission Statement. The Organisation should treat the vision and mission statement as living
documents and consider them to be an integral part of the firm’s culture. Profit and vision are
necessary to effectively motivates a workforce and shared vision create community of
interest.
Developing vision and mission Statements
Clear mission is needed before alternative strategies can be formulated and implemented.
Participation by as many managers as possible is important in development of the mission
statement because through involvement people become committed to the organisation.
Steps to follow when developing vision and mission statement
Having managers read related article; having managers prepare a vision and mission
statement for the organisation. Merge the document into one and distribute, then gather
feedback from managers and meet to revise the final document.
Importance or benefits of mission Statement
Achieve better financial result, Unanimity of purpose, resource allocation, there is
establishment of organisation culture and a focal point of individuals. Company will be able
to establish work structure. Development of basis of assessment and control and resolution of
divergent views. Resolution of divergent views refers to genuine decision based on having a
chance to be right and effective in decision made.
Benefits of having vision and mission statement
Achieve clarity of purpose among all managers and employees. Provide a basis for all other
strategic planning activities, including the internal and external assessment, establishing
objectives, developing strategies, choosing among alternative strategies, devising policies,
establishing organizational structure, allocating resources, and evaluating performance.
Provide direction. Provide a focal point for all stakeholders of the firm. Resolve divergent
views among managers. Promote a sense of shared expectations among all managers and
employees. Project a sense of worth and intent to all stakeholders. Project an organized,
motivated organization worthy of support. Achieve higher organizational performance.
Achieve synergy among all managers and employee.
Vision and mission statement
Provides unity direction, promote shared expectations and consolidates values. Project a
sense of worth and intent. They affirm the Company’s commitments to responsible action.
Declaration of attitude
Broad in Scope, Generation of strategic alternatives. Not overly specific, also reconciliation
of interest among diverse stakeholders. Finely balance between specificity and generality.
Arouse positive feelings and emotions; General favourable impression of the firm. Reflection
of future growth and provide criteria for strategy selection. Basis of generating and evaluating
strategic option and dynamic in nature.
Mission and Customer
As defined by Vern McGinnis, a mission statement should define what the organization
aspires to be. Limited to exclude some ventures and broad enough to allow for growth,
distinguish a firm from all others. Mission statement serves as a framework for evaluating
activities and states clearly understood by all. A good mission statement reflects the
anticipations of customer’s needs and identify customers’ needs and then provide a product
or service to satisfy those needs. A well-established mission statement identifies utility of a
firm’s product or services to its customers.
Utility of the firm’s product or services to customers
Do not offer me things. Do not offer me clothes. Offer me attractive looks. Do not offer me
shoes. Offer me comfort for my feet and the pleasure of walking. Do not offer me a house.
Offer me security, comfort, and a place that is clean and happy. Do not offer me books. Offer
me hours of pleasure and the benefit of knowledge. Do not offer me CDs. Offer me leisure
and the sound of music. Do not offer me tools. Offer me the benefits and the pleasure that
come from making beautiful things. Do not offer me furniture. Offer me comfort and the
quietness of a cozy place. Do not offer me things. Offer me ideas, emotions, ambience,
feelings, and benefits. Please, do not offer me things.
Components if Mission Statement
Strategic management feel that an effective mission statement should include nine
components and these are: - Customers; defines who are the firm’s customers, Products or
services; talks about the firm’s major products or services; Markets; defines firm’s
competition. Technology; ask if the firm technologically current. 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?
Self-concept - What is the firm’s 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?
Characteristics of a Mission Statement
Should be Comprehensive in scope. Should not include monetary amounts, numbers,
percentages, ratios, or objectives. Should be less than 250 words in length. Should be
inspiring. Must identify the utility of a firm’s products. Should reveal that the firm is socially
responsible and that the firm is environmentally responsible. Must Include nine components
customers, products or services, markets, technology, concern for survival/growth/ profits,
philosophy, self-concept, concern for public image, concern for employees. Should be
reconciliatory and enduring.
Conclusion