A NAG

Designed by Anubhuti

CORPORATE MISSION, OBJECTIVES AND RESPONSIBILITY

BUSINESS DEFINITION OF AN ORGANIZATION

BUSINESS DEFINITIONS OF HINDUSTAN LEVER, HERO HONDA, KODAK INDIA AND HERO CYCLES

MISSION STATEMENT

A Mission StatementEmbodies the business philosophy of a companys decision makers Implies the image the company wishes to project for itself Reflects the companys self-concept Indicates the companys principal product or service areas Includes the customer needs the company seeks to satisfy

MISSION AND VISION

BASIS Concerned with Answers the question

MISSION Present What is our business?

VISION Future Which way should we be going?

Focuses on

Present strategic thrust

Chartering the strategic path

DEVELOPING THE MISSION STATEMENT

A mission statement should be a declaration of organizational purpose, attitude or outlook. have a clear customer orientation. be a declaration of social objectives or policy.

It should answer questions pertaining to companys Philosophy Self-concept Products or services Markets Technology Concern for survival, growth and profitability Customers Concern for employees Concern for public image

MISSION STATEMENT : TATA IRON AND STEEL COMPANY

To strengthen Indias industrial base through increased productivity; Effective utilization of manpower and material resources; and, Continued application of modern scientific managerial methods.

MISSION STATEMENT: PEPSICO AND DELL COMPUTERS PEPSICO

To increase the value of our shareholders investment.

DELL COMPUTER
To be the most successful computer company in the world at delivering the best customer experience in markets we serve.

PROBLEMS WITH MISSION STATEMENT

Inhibiting role played by departmental interests and priorities

Can be vague or too general

Might be too specific

Difficult to identify the benefits

Staffs unawareness

Mission statements alone are not enough

Companies taking decisions inconsistent with mission statement

Short relevance nature of mission statement

CORPORATE PHILOSOPHY
The corporate philosophy envisages the basic beliefs, values, aspirations and philosophical priorities of a company which the management or strategic decision makers are committed to. Corporate objectives are
Focused; Specific; and, Usually quantitative.

CORPORATE OBJECTIVES AND GOALS

Desired states or outcomes are objectives. Goals are objectives that are scheduled for attainment during planned period. Ackoff Categories of corporate objectives:
Strategic Tactical Operational

AREAS OF OBJECTIVE SETTING: PETER DRUCKER

Market standing Innovation Productivity Physical and financial resources Profitability Manager performance and development Worker performance and attitude Public responsibility

OBJECTIVE SETTING
Objectives should be Clear and, not expressed in vague or general terms Precise and exact and, should be measurable as far as possible Consistent with organizational mission Logical and realistic rather than idealistic Reflecting of all the major areas of company performance and responsibility Based on strength and weakness analysis of the company to make them achievable Yielding specific results when fulfilled Reviewed periodically and should be reset in the context of changed circumstances

GOOD OBJECTIVE SETTINGEXAMPLES

We want to become the market leader within the next three years Our objective is to increase earning so that we can earn 15 per cent return on capital employed We aim to increase productivity by 10 per cent every year during the next three years

BAD OBJECTIVE SETTING EXAMPLES

We shall try to improve our position in the market during the next few years We shall always endeavour to increase productivity Our objective is to satisfy customers as far as possible

ORGANIZATIONAL LIFE CYCLE, OBJECTIVES AND STRATEGIC FOCUS

STRATEGIC INTENT
If a particular objective of a company becomes extremely focused and directed towards a specific target, the company is showing a strategic intent. Strategic intent of a company is clear about the end or the target, but, it is flexible with regard to the means and leaves room for creativity and improvisation.

COMPANY RESPONSIBILITY
Responsibilities are towards various stakeholders and the society at large. Sometimes, profit objective may lead to the neglect of corporate governance and responsibilities. Examples are: Exxons oil leak in Alaska ; defective tyres of Firestone; Ford recalling many of their trucks; Union Carbide gas leak in India (Bhopal gas tragedy), etc.

STAKEHOLDERS VIEW OF COMPANY RESPONSIBILITY

Stakeholder
Stockholders

Expectations/Claims
Sharing of profits; additional stock offerings; assets on liquidation; inspection of company books; transfer of stock; election of board of directors; and applicable additional rights. Interest payments as due and return of principal amount; security of pledged assets; relative priority in the event of liquidation; management and ownership prerogatives if conditions exist with the company (such as default of interest payments).

Creditors

Employees

Attractive compensation package; job satisfaction; freedom from arbitrary behaviour on the part of company officials; share in fringe benefits; freedom to join union and participate in collective bargaining; satisfactory working conditions. Competitive price; service provided with the product; suitable warranties; R&D leading to product improvement; facilitation of credit on attractive terms. Continuing business; timely payment and servicing of credit obligations; professional relationship in contracting for purchasing and receiving goods and services. Taxes (income, excise, sales, etc.); adherence to public policy dealing with the requirement of fair and free competition; discharge of legal obligations of business people (and business organizations); adherence to business law (MRTP, FEMA, etc).

Customers

Suppliers

Governments

Unions

Recognition as the negotiating agent for employees; to be recognized as a participant in the business organization; managemen ts cooperation in fair wage settlement.
Observation of the norms for competitive conduct established by the industry and society; ethical business practices; no price war.

Competitors

Local communities

Place for productive and healthy employment; participation of company officials in community affairs; provision of regular employment; fair play; interest in and, support of, local government; support of cultural and charitable projects. Participation in, and contribution to, society as a whole; assumption of some proportion of the burden of government and society; fair price for products and generating healthy competition.

The general public

STAKEHOLDERS CLAIMS, COMPANY MISSION AND OBJECTIVES

CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility can be defined as the alignment of business operations with social values. In India, CSR initiatives are mostly designed for the upliftment of the economically backward classes. In companies in developed countries, the focus is more on adoption of environment-friendly measures or schemes.

CSR PRACTICES IN CORPORATES

The Infosys Foundation works for both economic and social upliftment of the villages it has adopted.

Hero Honda has adopted a number of villages in and around its plant in Dharughera (near Delhi) for integrated rural development.

CORPORATE SOCIAL RESPONSIBILITY AND PROFITABILITY The relationship between CSR and profit is complex. In the case of CSR, costs and benefits are both economic and social. Economic costs and benefits may be easily quantifiable, but, social costs and benefits are not so easily measurable.

SOCIAL AUDIT
Social audit evaluates or measures a companys performance against planned or laid down social objectives or goals. A social audit should be like a financial audit. A social audit may be undertaken internally by companies; or, they may engage outside consultants to conduct the audit. It improves a companys public image and social standing. In India, social audit was first carried out for Tata Steel by the Social Audit Committee appointed by the company.