BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.

COM 1
BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 2
BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 3
 Part-II Strategic Formulation

Chapter -3

The Business Vision

and Mission

.
BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 4
 CHAPTER OBJECTIVES

After studying this chapter, students should be able to do the following:

1. Describe introduction of strategic formulation
2. Discuss the nature and role of vision and mission statements in strategic management.
3. Discuss characteristics of effective business mission
4. Identify the components of mission statements.
5. Evaluate mission statements of different organizations.
6. Discuss long objective, differentiate long objective and goal

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 5

 Introduction

Strategy Formulation?

Ø Strategy formulation, often referred to as strategic planning or long-

range planning, is concerned with developing a corporation’s, vision,

mission, objectives, strategies, and policies.

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 6

Introduction…
.

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 7

 VISION

Should answer the basic question, “What Do We Want to Become”?

Strategic vision is concerned with “where we are going and why,”

i.e. it portrays a company’s future business scope.

Ø provides the foundation for developing a comprehensive mission statement

Ø should be short, clear, preferably one sentence, and as many managers as possible
should have input into developing the statement.

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 8

 Vision Statement Examples class activity which one is good or not?

Tyson Foods’ vision

Ø Tyson Foods’ vision is to be the world’s first choice for protein solutions while maximizing shareholder value.
(Author comment: Good statement, unless Tyson provides nonprotein products)

General Motors’ vision

Ø General Motors’ vision is to be the world leader in transportation products and related services.
(Author comment: Good statement)

Procter & Gamble’s vision

Ø Procter & Gamble’s vision is to be, and be recognized as, the best consumer products company in the world.

(Author comment: Statement is too vague and readability is not that good)

source:(Fred R. David.—13th ed , p34)

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 9

 MISSION

Ø The mission statement is a declaration of an organization’s “reason for being.”

Ø It answers the pivotal question “What is our business?”

Ø It deals with the company’s present business scope and purpose:-

“where we are now, what we do, and why we are here.”

Ø A clear mission statement is essential for effectively

establishing objectives and formulating strategies.
Ø A re-examination of existed organization’s current mission or
the new one must be made before alternative strategies can be generated and evaluated

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM

10
 MISSION ---
Good mission statements identify the utility of a firm’s products to its customers.
For example the following utility statements are relevant in developing a mission
statement. Offering customers,
ü energy rather than oil and gas;
ü transportation rather than railroads;
ü entertainment rather than movies
ü comfort for their feet and the pleasure of walking rather than shoes

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 11

Nature of Business Mission
•It gives social reasoning.
ü It specifies the role which the organization plays society.
ü It is the basic reason for existence
•It is philosophical and visionary and relates to top management values.

•It has long term perspective.

•It legitimizes societal existence
•It reflects corporate philosophy, identity, character and image of organization.

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 12

 Characteristics of Business Mission
What characteristics should be included in order to be effective a mission?
Class Activity
in order to be effective a mission statement should posses the following characteristics .
ü A mission statement should be realistic and achievable.
ü It should neither be too broad nor be too narrow.
ü A mission statement should not be ambiguous
ü It should have societal linkage.
ü It should not be static.
ü It should be motivating for members of the organization and of society.
ü The mission statement should indicate the process of accomplishing objectives.

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 13

Components of Mission

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 14

 Products
Services Markets
Customers

Technology
Mission
Employees
Elements

Survival
Growth
Profit
Public
Image
Self-Concept Philosophy

By Dr Chalchissa A. Associate Prof.,chalchissa@yahoo.com Ch 2 -15

 Components of Mission
Components and corresponding questions that a mission statement should answer are given here.
 1. Customers: Who are the enterprise's customers?
2. Products or services: What are the firm's major products or services?
3. Markets: Where does the firm compete?
4. Technology: What is the firm's basic technology?
5. Concern for survival, growth, and profitability: What is the firm's commitment towards economic
objectives?
6. Philosophy: What are the basic beliefs, core values, aspirations and philosophical priorities of the firm?
7. Self-concept: What are the firm's major strengths and competitive advantages?
8. Concern for public image: What is the firm's public image?
9. Concern for employees: What is the firm's attitude/orientation towards employees?

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 16

Mission Statement Evaluation Matrix

TABLE 2-2 Example Mission Statements ( freed, 13ED, –p46 )

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 17

 Mission Statement Evaluation Matrix
Bontu & Jime’s Mission (Class activity)
Bontu & Jime’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.

By Dr Chalchissa A. Associate Prof.,chalchissa@yahoo.com Ch 2 -18

 Organization
Component

Bontu & Jime’s

Customers
Products or
Services
Markets

Concern for
survival,
growth
profitability
By Dr Chalchissa A. Associate Prof.,chalchissa@yahoo.com
Technology
Philosophy

Self-Concept

Concern for
Public Image

Concern for
Mission Statement Evaluation Matrix ( yes or no)

employees
Ch 2 -19
 Mission Statement Evaluation Matrix

Component

Public Image
Self-Concept

Concern for
Technology
Philosophy
Concern for

Concern for
Products
Services

profitability
Customers

employees
survival,
Markets

growth
Organization

Bontu &
Jime’s No Yes Yes Yes No No Yes Yes Yes

By Dr Chalchissa A. Associate Prof.,chalchissa@yahoo.com Ch 2 -20

 Objectives
Long term Objectives
ü Long-term objectives represent the results expected from pursuing certain strategies.

üOrganizational objectives are defined as ends which the organization seeks to achieve by its existence and operation.

üThey indicate the specific sphere of aims, activities and accomplishments

üMust be SMART
Annual Objectives
Ø short-term milestones that organizations must achieve to reach long-term objectives

Like long-term objectives; annual objectives should be measurable, quantitative, challenging, realistic,
consistent, and prioritized

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 21

 Goals

Goals provide a direction to the organization and

all the divisions work towards the attainment of the set objectives.

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 22

The Difference between goals and objectives

•Goals are broad while objectives are narrow

•Goals are general intentions; objectives are precise
•Goals are intangible; objectives are tangible
• Goals are abstract; objectives are concrete

•Goals are more influenced by external environment than objective.

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 23

 End

CHAPTER -3

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 24

 Assurance Learning Exercise (1)

Conducting Mission Statement Research

Purpose
This exercise gives you the opportunity to study the nature and role of vision and mission statements in
strategic management

Instructions
Step 1 Call various organizations in your city or county to identify firms that have developed a formal
vision and/or mission statement. Contact non-profit organizations and government agencies in addition to
small and large businesses. Ask to speak with the director, owner, or chief executive officer of each
organization. Explain that you are studying vision and mission statements in class and are conducting
research as part of a class activity.

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 25

 Assurance Learning Exercise (1)….

Step 2 Ask several executives the following four questions, and record their answers.
1. When did your organization first develop its vision and/or mission statement? Who was
primarily responsible for its development?
2. How long have your current statements existed? When were they last modified? Why
were they modified at that time?
3. By what process are your firm’s vision and mission statements altered?
4. How are your vision and mission statements used in the firm?
Step 3 Report your findings to the class.

BY DR CHALCHISSA A. ASSOCIATE PROF.,CHALCHISSA@YAHOO.COM 26