MODULE 2

THE BUSINESS VISION AND MISSION

LEARNING OBJECTIVES
1. Describe the nature and role of vision and mission statements in strategic
management.
2. Discuss why the process of developing a mission statement is as important as the
resulting document.
3. Identify the components of mission statements.
4. Discuss how clear vision and mission statements can benefit other strategic-
management activities.
5. Evaluate mission statements of different organizations.
6. Write good vision and mission statements.

SUGGESTED READINGS
● Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 6 th Ed.,
Fred R. David/Forest R. David (Chapter 5)
● Professor’s PPT

Philippine Central University- Manila 1

Course: Strategic Management 1
Prof. Dr. Erwin C. Zabala
Student: Julienne L. Fortunato-Lobchoy, B8 MBA
MODULE 2
THE BUSINESS VISION AND MISSION

A. WHAT DO WE WANT TO BECOME?

- A vision statement should answer the basic question, “What do we want to become?”
- The vision statement should be short, preferably one sentence, and as many managers
as possible should have input into developing the statement.

EXAMPLES OF VISION STATEMENT:

• General Motors’ vision is to be the world leader in transportation products and related
services. (Author comment: Good statement)
• PepsiCo’s responsibility is to continually improve all aspects of the world in which we
operate—environment, social, economic—creating a better tomorrow than today.
(Author comment: Statement is too vague; it should reveal how the firm’s food and
beverage business benefits people)
• Royal Caribbean’s vision is to empower and enable our employees to deliver the best
vacation experience for our guests, thereby generating superior returns for our
shareholders and enhancing the well-being of our communities. (Author comment:
Statement is good but could end after the word guests)

B. WHAT IS OUR BUSINESS?

- Mission statement is a declaration of an organization’s “reason for being.” It answers
the pivotal question “What is our business?”
- It is essential for effectively establishing objectives and formulating strategies.
- Mission statement reveals what an organization wants to be and whom it wants to
serve.
- Also called a creed statement, a statement of purpose, a statement of philosophy, a
statement of beliefs, and a statement of business principles
-
VISION VERSUS MISSION
- Shared vision creates a commonality of interests that can lift workers out of the
monotony of daily work and put them into a new world of opportunity and
challenge.

C. THE PROCESS OF DEVELOPING VISION AND MISSION STATEMENTS

- Select several articles about these statements and ask all managers to read these as
background information.
- Ask managers themselves to prepare a vision and mission statement for the
organization.
- Merge these statements into a single document and distribute the draft statements to
all managers.
- Process should create an “emotional bond” and “sense of mission” between the
organization and its employees.
Philippine Central University- Manila 2
Course: Strategic Management 1
Prof. Dr. Erwin C. Zabala
Student: Julienne L. Fortunato-Lobchoy, B8 MBA
 D. IMPORTANCE OF VISION AND MISSION STATEMENTS
1. To ensure unanimity of purpose within the organization.
2. To provide a basis, or standard, for allocating organizational resources.
3. To establish a general tone or organizational climate.
4. To serve as a focal point for individuals to identify with the organization’s purpose
and direction
5. To facilitate the translation of objectives into a work structure
6. To specify organizational purposes

E. BENEFITS OF HAVING A CLEAR MISSION AND VISION

1. Achieve clarity of purpose among all managers and employees.
2. Provide a basis for all other strategic planning activities, including internal and
external assessment, establishing objectives, developing strategies, choosing among
alternative strategies, devising policies, establishing organizational structure,
allocating resources, and evaluating performance.
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve divergent views among managers.
6. Promote a sense of shared expectations among all managers and employees.
7. Project a sense of worth and intent to all stakeholders.
8. Project an organized, motivated organization worthy of support.
9. Achieve higher organizational performance.
10. Achieve synergy among all managers and employees.

F. CHARACTERISTICS OF A MISSION STATEMENT

- A mission statement is a declaration of attitude and outlook. It usually is broad in scope
for at least two major reasons.
A. First, a good mission statement allows for the generation and consideration of a
range of feasible alternative objectives and strategies without unduly stifling
management creativity.
B. Second, a mission statement needs to be broad to reconcile differences
effectively among, and appeal to, an organization’s diverse stakeholders, the
individuals and groups of individuals who have a special stake or claim on the
company.
9 Characteristics of a Mission Statement
1. Broad in scope; does not include monetary amounts, numbers, percentages, ratios, or
objectives
2. Fewer than 150 words in length
3. Inspiring
4. Identifies the utility of a firm’s products
5. Reveals that the firm is socially responsible
6. Reveals that the firm is environmentally responsible

Philippine Central University- Manila 3

Course: Strategic Management 1
Prof. Dr. Erwin C. Zabala
Student: Julienne L. Fortunato-Lobchoy, B8 MBA
 7. Includes nine components: customers, products or services, markets, technology,
concern for survival/growth/profits, philosophy, self-concept, concern for public image,
concern for employees
8. Reconciliatory
9. Enduring

A CUSTOMER ORIENTATION
- The mission statement should reflect the anticipations of customers. Rather than
developing a product and then trying to find a market, the operating philosophy of
organizations should be to identify customers’ needs and then provide a product or
service to fulfill those needs.
- Good mission statements identify the utility of a firm’s products to its customers.
- A major reason for developing a mission statement is to attract customers who give
meaning to an organization.

G. MISSION STATEMENT COMPONENTS

1. Customers — Who are the firm’s customers?
2. Products or services — What are the firm’s major products or services?
3. Markets — Geographically, where does the firm compete?
4. Technology — Is the firm technologically current?
5. Survival, growth, and profitability — Is the firm committed to growth and financial
soundness?
6. Philosophy — What are the basic beliefs, values, aspirations, and ethical priorities of the
firm?
7. Self-concept (distinctive competence) — What is the firm’s major competitive advantage?
8. Public image — Is the firm responsive to social, community, and environmental concerns?
9. Employees — Are employees a valuable asset of the firm?

EXAMPLES OF MISSION STATEMENT

⮚ Dell’s mission is to be the most successful computer company (2) in the world (3) at
delivering the best customer experience in markets we serve (1). In doing so, Dell will
meet customer expectations of highest quality; leading technology (4); competitive
pricing; individual and company accountability (6); best-in-class service and support (7);
flexible customization capability (7); superior corporate citizenship (8); financial stability
(5).
⮚ Procter & Gamble will provide branded products and services of superior quality and
value (7) that improve the lives of the world’s (3) consumers. As a result, consumers (1)
will reward us with industry leadership in sales, profit (5), and value creation, allowing
our people (9), our shareholders, and the communities (8) in which we live and work to
prosper.
⮚ Procter & Gamble will provide branded products and services of superior quality and
value (7) that improve the lives of the world’s (3) consumers. As a result, consumers (1)
will reward us with industry leadership in sales, profit (5), and value creation, allowing

Philippine Central University- Manila 4

Course: Strategic Management 1
Prof. Dr. Erwin C. Zabala
Student: Julienne L. Fortunato-Lobchoy, B8 MBA
 our people (9), our shareholders, and the communities (8) in which we live and work to
prosper.

SUMMARY
Every organization has a unique purpose and reason for being. This uniqueness should
be reflected in vision and mission statements. The nature of a business vision and mission can
represent either a competitive advantage or disadvantage for the firm. An organization
achieves a heightened sense of purpose when strategists, managers, and employees develop
and communicate a clear business vision and mission. Drucker says that developing a clear
business vision and mission is the “first responsibility of strategists.”
A good mission statement reveals an organization’s customers; products or services;
market technology; concern for survival, growth, and profitability; philosophy; self-concept;
concern for public image; and concern for employees. These nine basic components serve as a
practical framework for evaluating and writing mission statements. As the first step in strategic
management, the vision and mission statements provide direction for all planning activities.
Well-designed vision and mission statements are essential for formulating,
implementing, and evaluating strategy. Developing and communicating a clear business vision
and mission are the most commonly overlooked tasks in strategic management. Without clear
statements of vision and mission, a firm’s short-term actions can be counterproductive to long-
term interests. Vision and mission statements always should be subject to revision, but, if
carefully prepared, they will require infrequent major changes. Organizations usually reexamine
their vision and mission statements annually. Effective vision and mission statements stand the
test of time.

REVIEW QUESTIONS
1. Differentiate vision and mission statement.
Vision is a company's outlook for the future. It is what the business aspires to be in
the future.
The company's mission is its primary objective and the basis for its existence. It is now
articulated and provides information on the company's services, goods, values, and
activities.

2. List three things you are on a mission to accomplish in the next three years. How
relevant is the concept of vision/mission to an individual in their personal and
professional life? Explain.
In the next three years, I would like to be recognized as an expert in this sector. This
job will for sure provide me with a golden opportunity to do the same. Since I already
have a few years of work experience, I am excited to take up managerial
responsibilities in the coming few years. Besides, I have the potential to lead projects,
and if I am able to deliver, I am sure this organization will give me the chance to
become one of the forerunners. I would like to mention that in the past, I have
worked with some amazing managers. Under them, I have bloomed into a
professional with great managerial skills myself. Few years ago, I wanted to be where I
am today. So, three years from now, I want to set up realistic goals for myself and also
Philippine Central University- Manila 5
Course: Strategic Management 1
Prof. Dr. Erwin C. Zabala
Student: Julienne L. Fortunato-Lobchoy, B8 MBA
 for my organization. I will keep the same fire alive within and I hope I will achieve my
goal.

3. List the nine mission statement components. Give an example of each component for
your college or university.
Example components is based on University of the Cordilleras
1. Customers — Students
2. Products or services — Education
3. Markets — Baguio/Benguet
4. Technology — Updated laboratories (i.e., iPads in the library; Apple iMac Desktops)
5. Survival, growth, and profitability — Non-Profit Organization
6. Philosophy — A University that is conducive to produce graduates who are locally
committed, globally engaged, and are ready to take on the demands of today's
globalized world.
7. Self-concept (distinctive competence) — The only school that is based in
Baguio/Benguet that offers Trimestral education.
8. Public image — Project HELEN
9. Employees — Food and Transportation allowance per month

4. Do local fast-food restaurants need a mission statement posted in their place of

business? Why or why not?
Yes, a local fast-food restaurants still need a mission statement posted in their place
of business because it provides your customers, staff, and stakeholders with a
connection to your establishment. It defines your restaurant’s values, purpose, and
unique elements making your location more relatable and memorable.

5. How often do you think a firm’s vision and mission statements should be changed?
Why?
A company's vision and mission statements can change over time. As a company
grows and evolves, its goals and priorities may also change, which can be reflected in
its vision and mission statements. It is important for a company to regularly review
and update its statements to ensure they align with its current values and objectives.
The performance of the company is based on the quality and the services rendered to
the clients. In order to evaluate the performance, the company proposes to conduct
external audit through which the logic for introducing the strategic management
system within the company is analyzed. This can be done given the 3 to 5 years after
observing the previous vision and mission.

Philippine Central University- Manila 6

Course: Strategic Management 1
Prof. Dr. Erwin C. Zabala
Student: Julienne L. Fortunato-Lobchoy, B8 MBA