UNIT-2: Strategy Formulation

UNIT-2.1: Vision and Mission

Definition of mission and vision statements: A mission statement
focuses on today and what an organization does to achieve it. A vision
statement focuses on tomorrow and what an organization wants to
ultimately become. Both are vital in directing goals.

What is the difference between Vision

and Mission?
Vision Statement
Mission
Statement
About A Mission statement talks about HOW you will get to A Vision
where you want to be. Defines the purpose and primary statement
objectives related to your customer needs and team outlines
values. WHERE you
want to be.
Communicate
both the
purpose and
values of your
business.

Answer It answers the question, “What do we do? What makes us It answers the
different?” question,
“Where do
we aim to
be?”

Time A mission statement talks about the present leading to its A vision
future. statement
talks about
your future.
 Vision Statement
Mission
Statement
Function It lists the broad goals for which the organization is It lists where
formed. Its prime function is internal; to define the key you see
measure or measures of the organization's success and its yourself some
prime audience is the leadership, team, and stockholders. years from
now. It
inspires you
to give your
best. It shapes
your
understanding
of why you
are working
here.

Change Your mission statement may change, but it should still As your
tie back to your core values, customer needs, and vision. organization
evolves, you
might feel
tempted to
change your
vision.
However,
mission or
vision
statements
explain your
organization's
foundation,
so change
should be
kept to a
minimum.

Developing a What do we do today? For whom do we do it? What is Where do we

statement the benefit? In other words, Why do we do what we do? want to be
What, For Whom, and Why? going
forward?
When do we
want to reach
that stage?
 Vision Statement
Mission
Statement
How do we
want to do it?

Features of an Purpose and values of the organization: Who are the Clarity and
effective statement organization's primary "clients" (stakeholders)? What are lack of
the responsibilities of the organization towards the ambiguity:
clients? Describing a
bright future
(hope);
Memorable
and engaging
expression;
realistic
aspirations,
achievable;
alignment
with
organizational
values and
culture.

VISION AND MISSION

Vision and mission statements are essential components of an organization's overall
strategy and direction. They provide a sense of purpose, guiding the organization in its
actions and decisions. Here's a breakdown of what each represents:

1. Vision Statement:
A vision statement outlines the long-term aspirations and overarching goals of an
organization. It paints a picture of what the organization aims to achieve in the future
and the impact it wants to make on the world. It's meant to inspire and motivate
employees and stakeholders. A good vision statement is:
 Forward-looking: Focuses on the future and what the organization strives to
become.
 Inspiring: Captures the imagination and enthusiasm of stakeholders.
 Concise and clear: Clearly articulates the desired future state.
Example: "To be the global leader in sustainable technology solutions, driving positive
environmental and social change for a better world."
2. Mission Statement:
A mission statement defines the organization's core purpose and the reason for its
existence. It describes what the organization does, who it serves, and how it serves
them. A well-crafted mission statement is:
 Clear and concise: Clearly states the organization's purpose and focus.
 Specific: Identifies the target audience, products, or services provided.
 Aligned with values: Reflects the values and principles that guide the
organization's actions.
Example: "Our mission is to provide affordable and accessible healthcare services to
underserved communities, improving the well-being and quality of life for all."

UNIT-2.2 THE BUSINESS VISION AND MISSION

1. PETER DRUCKER
We can perhaps best understand vision and mission by focusing on a
business when it is first started. In the beginning, a new business is simply a
collection of ideas. Starting a new business rests on a set of beliefs that the
new organization can offer some product or services to some customers, in
some geographic area, using some type of technology, at a profitable price.
A new business owner typically believes that the management philosophy
of the new enterprise will result in a favorable public image and that this
concept of the business can be communicated to, and will be adopted by
important constituencies. When the set of beliefs about a business at its
inception is put into writing, the resulting document mirrors the same basic
ideas that underlie the vision and mission statements. As a business grows,
owners or managers find it necessary to revise the founding set of beliefs,
but those original ideas usually are reflected in the revised statements of
vision and mission. Vision and mission statements often can be found at the
front of annual reports. They often are displayed throughout a firm’s
premises and are distributed with company information sent to
communities. The statements are part of numerous internal reports, such
as loan requests, supplier agreements, labor relations contracts, business
plans, and customer service agreements. In a recent study, researchers
concluded that 90 percent of all companies have used a mission statement
sometime in the previous five years.
 2. WHAT DO WE WANT TO BECOME?
Managers and executives in any organization need to agree upon the basic
vision that the firm strives to achieve in the long term. A vision statement
should answer the basic question. “What do we want to become?” A clear
vision provides the foundation for developing a comprehensive mission
statement. Many organizations have both a vision and n mission statement,
but the vision should be established first and foremost. The vision
statement should be short, preferably one sentence, and as many
managers as possible should have input into developing the statement.

WHAT IS OUR BUSINESS?

Current mission statements are based largely on guidelines outlined in the
mid-1970s by Peter Drucker, who is often called “the father of modern
management” for his pioneering studies at General Motors Corporation
and for his 22 books and hundreds of articles. Drucker has been called “the
preeminent management thinker of our time.” Drucker says that asking the
question “What is our business?” is synonymous with asking the question
“What is our mission?” An enduring statement of purpose that
distinguishes one organization from another similar enterprise, the mission
statement is a decline- the ratio of an organization’s “reason for being”. It
answers the pivotal question “What is our business?” A clear mission
statement is essential for establishing objectives and formulating
strategies.

Unit 2.3: Importance of vision and mission

The vision and mission of an organization are crucial elements that provide direction, purpose, and a
strategic framework for the entire organization. Here's a breakdown of their importance:

1. Guiding Purpose and Direction:

 Vision: It sets the long-term direction and paints a vivid picture of what the organization
aspires to achieve. It helps align all stakeholders towards a common goal, providing a shared
understanding of the organization's future state.
 Mission: It outlines the fundamental purpose of the organization, specifying its target
audience, what it offers, and how it operates. It provides a clear and concise description of
the organization's present-day focus.
2. Inspiring and Motivating Employees:
  A compelling vision and mission inspire employees, giving them a sense of purpose and a
reason to work toward the organization's objectives. It helps foster a positive and motivated
work culture.
3. Alignment of Efforts:
 The vision and mission align the efforts of all employees and stakeholders toward common
objectives. They help avoid confusion and conflicting goals by ensuring everyone is on the
same page regarding the organization's purpose and direction.
4. Decision-Making and Strategy Development:
 The vision and mission act as guidelines for decision-making. When faced with choices, they
serve as a reference point, helping organizations choose options that align with their long-
term goals and values.
 They also aid in the development of strategies, ensuring that strategic plans and initiatives
are in harmony with the desired future state (vision) and the organization's fundamental
purpose (mission).
5. Enhancing Stakeholder Engagement:
 Communicating a clear vision and mission helps in engaging stakeholders, including
investors, customers, suppliers, and the community. It creates confidence and trust in the
organization's objectives and direction.
6. Attracting and Retaining Talent:
 A compelling vision and mission can attract individuals who resonate with the organization's
values and goals. It helps in attracting talent that is aligned with the organization's culture
and purpose.
7. Measuring Performance and Progress:
 The vision and mission provide a basis for developing key performance indicators (KPIs) and
metrics to measure progress toward organizational goals. They enable regular assessment of
performance and alignment with the intended direction.
8. Crisis Management and Adaptability:
 During challenging times or crises, a clear vision and mission help in guiding the
organization's response and actions. They assist in making quick decisions that are in line
with the organization's fundamental purpose and long-term vision.

In summary, a well-crafted vision and mission statement are essential tools that help organizations
set the stage for success, align efforts, inspire stakeholders, and provide a framework for decision-
making and growth.

Unit 2.4:Components of Mission Statement :

Mission statements can differ by content, length, format, specifications, etc. It

is one of the most noticeable parts of an organization. Usually, a good mission
statement has the following components :

1) Products or Services :
A mission statement should indicate the products or services the organization
deals in.
For example: the mission statement of Assurant is, "to be the premier
provider of targeted specialized insurance products and related services in
North America and selected other markets".

2) Target Market :
An organization should indicate the type of market it serves in a mission
statement.
For example: while the mission of a cosmetic company may serve only
women, a company producing shaving creams and after-shave lotions would
serve only men.

3) Technology :
A mission statement should describe the technology being implemented to
achieve the organizational goals. This helps the organization in acquiring
better technology vendors.

4) Philosophy :
An efficient mission statement should outline the values held by the
organization. The values may include bringing inspiration and innovation,
adopting a customer-centric approach, creating lasting solutions to poverty as
well as hunger, raising voices against social injustice, etc.

5) Policy for Employees :

A mission statement should indicate its policies regarding its employees so
that they realize their importance in the organization.

6) Self-Concept :
A mission statement should always define the competitive advantage of the
organization.
For example: the mission statement of Toyota is "Toyota will lead the way to
the future of mobility, enriching lives around the world with the safest and
most responsible ways of moving people. Through a commitment to quality,
constant innovation, and respect for the planet, we aim to exceed
expectations and be rewarded with a smile. We will meet challenging goals by
engaging the talent and passion of people, who believe there is always a
better way".

7) Concern for Survival, Growth, and Profitability :

For a commercial organization, it is essential to mention its financial objectives
in the mission statement. This will allow the stakeholders to know the financial
motives and strategies.
For example: the mission statement of McGraw-Hill is, "to serve the
worldwide need for knowledge at a fair profit by adhering, evaluating,
producing, and distributing valuable information in a way that benefits our
customers, employees, other investors, and our society".

8) Public Images :
By formulating a mission statement, strategic leaders can convey the basic
features and functions of the organization which helps in creating a positive
public image. It helps the managers to guide the employees as per the
approved public image.

9. Organizational Identity:
 Organization's Name: Clearly state the name of the organization.
10. Purpose and Scope:
 Purpose Statement: Define the fundamental reason for the organization's
existence, addressing what it does and who it serves.
 Scope of Operations: Describe the geographical, industry, or market focus of the
organization, specifying where and how it operates.
11. Target Audience or Beneficiaries:
 Target Audience: Identify the primary groups, communities, or stakeholders the
organization aims to serve or benefit.
12. Products or Services:
 Products/Services Offered: Specify the main products or services that the
organization provides to meet the needs of its target audience.
13. Values and Beliefs:
 Core Values: Enumerate the fundamental principles, ethics, or beliefs that guide
the organization's behavior, decisions, and actions.
14. Differentiation or Unique Selling Proposition (USP):
  Unique Attributes: Highlight what sets the organization apart from others in the
same industry or sector, emphasizing its distinctive features, strengths, or
competitive advantages.
15. Commitment to Stakeholders:
 Stakeholder Commitment: Express the organization's commitment to meeting
the needs, expectations, and interests of various stakeholders, such as customers,
employees, shareholders, and the community.
16. Vision of the Future:
 Long-Term Goals/Vision: Convey the organization's long-term aspirations and
what it aims to achieve in the future, reflecting a desired future state.
17. Sustainability and Social Responsibility:
 Sustainability and Social Responsibility: Address the organization's
commitment to sustainability, ethical practices, environmental responsibility, and
societal contributions.
18. Culture and Behavior Guidelines:
 Cultural Expectations: Describe the desired organizational culture and the
behavior expected from employees in achieving the mission and goals.
19. Strategic Approach:
 Strategic Approach: Briefly outline the strategy or approach the organization
will use to fulfill its mission and achieve its goals.
20. Adaptability and Flexibility:
 Adaptability and Flexibility: Express openness to change, adaptation, and
continuous improvement in response to evolving circumstances and
opportunities.
21. Conciseness and Clarity:
 Conciseness and Clarity: Ensure that the mission statement is clear, concise, and
easily understandable by all stakeholders.
22. Inspiring Language:
 Inspiring Language: Use inspiring and motivational language to ignite passion
and commitment among stakeholders, fostering a sense of purpose and
dedication.

Unit 2.5: writing and evaluating mission statement

Creating a compelling mission statement involves a thoughtful and structured approach.

Here's a step-by-step guide to writing and evaluating a mission statement:
 Writing a Mission Statement:

1. Understand Your Organization:

 Gain a deep understanding of your organization's values, history, culture, goals,
and unique strengths.
2. Define the Purpose:
 Clearly articulate the primary purpose or reason for your organization's existence.
Answer the question: "Why does our organization exist?"
3. Identify Target Audience and Beneficiaries:
 Specify the primary groups or communities you aim to serve or benefit with your
products or services.
4. List Key Values and Principles:
 Identify the core values, beliefs, and guiding principles that drive your
organization's actions and decisions.
5. Outline Products/Services Offered:
 Enumerate the main products or services your organization provides to fulfill its
purpose.
6. Highlight Differentiation:
 Identify what sets your organization apart from others in terms of strengths,
competitive advantages, or unique attributes.
7. Consider Long-Term Goals/Vision:
 Reflect on your organization's long-term aspirations and what you aim to achieve
in the future.
8. Incorporate Sustainability and Responsibility:
 Emphasize your commitment to sustainability, ethical practices, social
responsibility, and environmental consciousness.
9. Capture Cultural Expectations:
 Describe the desired organizational culture and expected behavior from
employees.
10. Be Clear and Concise:
 Ensure the language used is clear, simple, and easily understood by all
stakeholders.
11. Inspire and Motivate:
 Use language that inspires and motivates employees, stakeholders, and the
community, fostering a sense of purpose and commitment.
12. Draft the Mission Statement:
 Compile all the elements above into a succinct, inspiring, and cohesive statement
that encompasses the organization's mission.
 Evaluating a Mission Statement:

1. Alignment with Purpose:

 Does the mission statement convey the fundamental purpose of the
organization?
2. Clarity and Simplicity:
 Is the mission statement clear, concise, and easily understandable by anyone who
reads it?
3. Inspirational and Motivational:
 Does the mission statement inspire and motivate stakeholders, including
employees and customers?
4. Relevance and Alignment:
 Does the mission statement align with the organization's values, goals, and
overall strategic direction?
5. Specificity and Focus:
 Is the mission statement specific about the organization's target audience,
products/services, and unique attributes?
6. Long-Term Aspirations:
 Does the mission statement reflect the organization's long-term goals and vision
for the future?
7. Differentiation and Uniqueness:
 Does the mission statement highlight what sets the organization apart from
others in the industry?
8. Cultural Reflection:
 Does the mission statement reflect the desired organizational culture and
behavior?
9. Feasibility and Practicality:
 Is the mission statement realistic and achievable given the organization's
resources and capabilities?
10. Feedback and Iteration:
 Gather feedback from key stakeholders, including employees and leadership, and
be willing to iterate and refine the mission statement based on constructive
input.