Chapter 2

Establishing Strategic Intent (Business Vision,

Mission & Value)

Ch 2 -1
After studying this chapter, you should be able to do
the following:

 Describe the nature and role of vision and mission

statements.
 Identify the components of mission statements.
 Discuss how clear vision and mission statements
can benefit other strategic-management activities.
 Evaluate mission statements of different
organizations.

Ch 2 -2
“A business is not defined by its name, statutes, or
articles of incorporation. It is defined by the
business mission. Only a clear definition of the
mission and purpose of the organization makes
possible clear and realistic business objectives.”

Peter Drucker

Ch 2 -3
“A strategist’s job is to see the company not as it
is . . . but as it can become.”

John W. Teets, Chairman of Greyhound, Inc.

Ch 2 -4
Ch 2 -5
Vision & Mission

Shared Vision-
 Creates commonality of interests
 Reduce daily monotony
 Provides opportunity & challenge

Ch 2 -6
 Establishing Strategic Intent
 By strategic intent, we refer to the purpose the organization
strives for.
 These may be expressed in terms of hierarchy of strategic intent.
Broadly stated, these could be in the form of a vision and mission
statement for the organization as a corporate whole.
 Strategic intent lays down the framework within which firms
would operate, adopt a predetermined direction, and attempt to
achieve these goals.
 Overall, strategic intent points out to what a firm should set out to
achieve….. Hamel and Prahalad.

Ch 1 -7
Vision
 Kotler (1990) defines vision as a “description of
something (an organization, corporate culture, a
business, a technology, an activity) in future.”
 El-Namaki (1992) considers vision as a “mental
perception of the kind of environment an
individual, or an organization, aspires to create
within a broad time horizon and the underlying
conditions for the actualization of this perception.”

Ch 1 -8
 Vision …
 Miller and Dess (1996) view vision as the “category
of intentions that are broad, all inclusive, and
forward thinking.”
 Morrisey (1996): “It is intuition, what is thought that
the future of the organization should be from the
point of view of the clients, employees, owners and
other important stakeholders”.
 To sum up, the vision represents, the mental projection
in the present of the company’s future expectations. It is
a picture of what the firm wants to be and, in broad
terms, what it wants to ultimately achieve.
 A vision articulates the position that a firm would like to attain in the
distant future.
Ch 1 -9
 The vision Statement
 A vision statement articulates the ideal
description of an organization and gives shape
to its intended future.
 A vision statement tends to be relatively short
and concise, making it easily remembered. It
should be also simple, positive, and emotional.
 However, an effective vision must stretch and
challenge people as well.

Ch 1 -10
 The vision statement….
 Vision statements reflect a firm’s aspirations and are
intended to capture the heart and mind of each employee
and, hopefully, many of its other stakeholders.
 Experience shows that the most effective vision statement
results when a host of stakeholders (e.g., top-level
managers, employees working in different parts of the
organization, suppliers, and customers) are involved in
developing it.
 It should be clearly tied to the conditions in the firm’s
external environment and internal organization.

Ch 1 -11
 Benefits of Having a Vision Statement
 Good visions are inspiring and exhilarating.
 Visions represent a discontinuity, a step function
and jump ahead so that the company knows
what it is to be.
 Good visions help in the creation of a common
identity and shared sense of purpose.
 Good visions are competitive, original and
unique. They make sense in the marketplace.
 Good visions foster risk-taking and
experimentation.
Ch 1 -12
 Vision Statement Examples
1. “To be the world leader in transportation
products and related services.” (General
Motors)
2. “Our vision is to be the world’s best quick
service restaurant.” (McDonald’s)
3. “To make the automobile accessible to
every American.” (Ford Motor
Company’s vision when established by
Henry Ford)
Ch 1 -13
 Mission
 The company mission is defined as the
fundamental, unique purpose that sets a
business apart from other firms of its type and
identifies the scope of its operations in product
and market terms.
 An organization’s mission is the purpose or
reason for the organization’s existence.
 The Mission is a broadly framed but enduring
statement of company intent.

Ch 1 -14
Mission Statement

“What is our business?”

Ch 2 -15
 Mission statement ….

 An enduring statement of purpose that

distinguishes one organization from other
similar enterprises.
 It is a declaration of an organization’s
“reason for being”.
 A mission statement written by a company
represents ‘what it is about’, it describes an
organization's basic purpose.
Ch 1 -16
Mission statement…
 Mission statement expresses the essential
characteristics of the organization, the
reasons for its existence, the nature of its
business, the groups who are served by the
company (its corporate responsibilities), and
the principles/values under which it operates.
 A mission statement may also include the
firm’s values and philosophy about how it
does business and treats its employees.
Ch 1 -17
Mission Statements- summarized

•Enduring statement of purpose

•Distinguishes one firm from another
•Declares the firm’s reason for being
•Inspiring
•Identify the utility of a firm’s products
•Reveal that the firm is socially responsible
•Reveal that the firm is environmentally responsible
•Include nine components
•Reconciliatory

Ch 2 -18
Benefits of an Explicit mission

 Achieve clarity of purpose among all managers and

employees.
 Provide a basis for all other strategic planning
activities.
 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.

Ch 2 -19
Benefits continued

 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 employees.

Ch 2 -20
 Formulating a Mission
 An important first step in the process of formulating a
mission is to come up with a definition of the organization’s
business.
 Essentially, the definition should answer these questions:
“What is our business? What will it be? What should it be?”
 The responses guide the formulation of the mission. To
answer the question, “What is our business?” a company
should define its business in terms of three dimensions:
 who is being satisfied (what customer groups),
 what is being satisfied (what customer needs), and
 how customer needs are being satisfied (by what skills,
knowledge, or competences).
Ch 1 -21
 Formulating mission…..
 Specifically, a mission statement should reflect the following
set of elements:
1. The basic type of product to be offered ,
2. The primary markets or customer groups to be served,
3. The technology to be used in production or delivery,
4. The fundamental concern for survival through growth and
profitability,
5. The management philosophy of the firm,
6. The public image sought, and
7. The self concept those affiliated with it should have of the
firm.

Ch 1 -22
 Products
Services Markets
Customers

Technology

Employees
Mission
Elements

Survival
Growth
Profit
Public
Image
Self-Concept Philosophy

Ch 2 -23
 Characteristics of Good Mission Statement
1. Broad in scope; do not include monetary amounts,
numbers, percentages, ratios or objectives.
2. Less than 250 words in length.
3. Inspiring
4. Identify the utility of the products of the firm
5. Reveals that the firm is socially and environmentally
responsible.
6. Include nine components: customers, products, markets,
technology, concern for survival/growth/profit, philosophy,
self concept, concern for public image, concern for
employees.
7. Reconciliatory lasting.

Ch 1 -24
 Examples of a mission statement
1. To organize the world’s information and make it
universally accessible and useful (Google).
2. We shall build good ships here-at a profit if we
can-at a loss if we must-but always good ships.
(Newport News Shipbuilding, unchanged since
its founding in 1886).

Ch 1 -25
Mission example….
 Pepsico “We aspire to make PepsiCo the world’s
premier consumer products company, focused on
convenient foods and beverages. We seek to
produce healthy financial rewards for investors as
we provide opportunities for growth and
enrichment to our employees, our business
partners and the communities in which we
operate. And in everything we do, we strive to act
with honesty, openness, fairness and integrity.”

Ch 1 -26
Mission example……
 Dell- “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 consumer
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”.
Ch 1 -27
 Vision versus Mission
 Mission describes what the organization is now;
vision describes what the organization would like to
become.
 While a mission statement tells why your business exists; a
vision statement tells you where you are going. It paints a
compelling word picture of a desired future state.
 Mission gives day-to-day relevance to work; Vision
inspires stretching beyond what may seem possible.
 Mission occasionally changes to become congruent with
a new vision; Visions, like dreams, will change as they
are fulfilled.

Ch 1 -28
 Values
 Some companies prefer to list their values and
philosophy of doing business in a separate
publication called a values statement.
 The values of a company state how managers
and employees should conduct themselves,
how they should do business, and what kind of
organization they should build to help the
company achieve its mission.

Ch 1 -29
Values…
 In so far as they help drive and shape
behavior within a company, values are
commonly seen as the bedrock of a
company’s organizational culture: the set of
values, norms, and standards that control
how employees work to achieve an
organization’s mission and goals.
 Core values rarely if ever change.

Ch 1 -30
Thank You

Ch 1 -31