CHAPTER-

TWO

Vision , Mission,
objectives and values
 Objectives…….

At the end of this unit, students will be able to:

– Define the concept of vision, mission and values of a
business
– Able to develop vision and mission statements;
– describe the importance of mission, vision and values
– Explain the nature of business mission
– Illustrate components of mission statement
– Describe strategic issues
– Able to set goals and objectives
 Cont`d…

– Strategy Formulation is the development of long-

range plans for the effective management of
environmental opportunities and threats, in light of
corporate strengths and weaknesses.
– It includes defining the corporate mission, specifying
achievable objectives, developing strategies, and
setting policy guidelines.
2.1 Vision Statement

– Sometimes called a picture of your company in the

future but it’s so much more than that.
– It is your inspiration, the framework for all your
strategic planning.
– It answers the question, “Where do we want to go?”.
– It also answers the question “What do we want to
become?”
– It is the reminder of what you are trying to build.
– A clear vision provides the foundation for
developing a comprehensive mission statement
Cont`d…

– It articulates the position that a firm would like to

attain in the distant future. It is “big picture”
thinking with passion.
– It is also a future aspirations that lead to be the
best in one’s field of activity.
– A vision usually precedes the mission statement.
– It is usually short, concise and preferably limited to
one sentence.
– It defines the desired future state of an organization
in terms of its objective and/or strategic direction.
Cont`d…

– It must be compelling, inspiring and make

people want to join the organization. If vision is
vivid and meaningful enough, people can do
outstanding things to bring to realization.
– If it is lacking meaning, no amount of resources
will induce people to move forward.
– It concentrates on the future and provides clear
decision-making criteria.
Purpose of Vision

– It is used as an initial force that brings people

together.
– It can provide energy, momentum and strengths to
individuals.
– It inspires stakeholders.
– It is life-blood of an organization.
– It helps to see what you are working towards.
– It provides bases for partnership
– It binds an organization together in times of crises
Cont`d..

– It is determined by asking the following

questions:
– What would the country lose if our
organization ceased to exist?
– Why do we want to dedicate our creative
energies to this organization’s effort?
– What does our organization do to fill basic
human needs?
– What does our organization do that impact the
country?
 Features of an effective vision
include:

A vision statement must be:

– Clare and lacks ambiguity. – Alignment with organizational

– Short and concise. values and culture.
– Vivid and clear picture: Easily – Simple.
remembered.
– Positive.
– Description of a bright future.
– Memorable and engaging wording. – Emotional.
– Realistic aspirations: - Capture the heart – Stretching.
and mind of employees and stakeholders.
– Challenging.
Cont`d…

– Examples
– “To be the world leader in transportation products and
related services.” (General Motors)
– “Our vision is to be the world’s best quick service
restaurant.” (McDonald’s)
– “To make the automobile accessible to every American.”
(Ford Motor Company’s vision when established by Henry
Ford)
2.2 Mission Statement

– It is the foundation for priorities, strategies,

plans, and work assignments.
– It is the starting point for the design of jobs and
organizational structures.
– An organization’s mission is its purpose, or the
reason for its existence.
– It tells what the company is providing to society,
such as housecleaning or manufacturing
automobiles.
Cont`d….

– Mission Statements are also called

– Creed statement
– Statement of purpose
– Statement of philosophy
– Statement of beliefs
– Statement of business principles
– A statement “defining our business”
 Cont`d….

– A well-conceived mission statement defines

the fundamental, unique purpose that sets a
company apart from other firms of its type
and identifies the scope of the company’s
operations in terms of products (including
services) offered and markets served.
– It puts into words not only what the company
is now, but also a vision of what it wants to
become.
Cont`d….

– It promotes a sense of shared expectations in

employees and communicates a public image to
important stakeholder groups in the company’s
task environment.
– A mission statement reveals who the company is
and what it does.
Example:- “To organize the world’s information and
make it universally accessible and useful”.
Characteristics of good mission

– Feasible:
– It should not be an impossible statement.
– In addition it should be realistic and achievable.
– Precise
– It should not be so narrow to restrict the
organization’s activities nor should it be too broad to
make itself meaningless.
– Clear:
– should be clear enough to lead to action and should
not be a high sounding set platitudes meant for
publicity purposes.
Cont`d…

– Motivating: should be inspiring for members of

the organization or being its customers.
– Distinctive: the indiscriminate one (random,
arbitrary) is likely to have little impact.
– Indicate major components of strategy: along
with the organizational purpose.
– Indicate how objectives are to be accomplished:
it should provide clues regarding the manner in
which the objectives are to be accomplished.
Cont`d….

– Enduring: it has to be long lasting.

– A Declaration of Attitude: A mission
statement is more than a statement of
specific details; it is a declaration of attitude
and outlook. It usually is broad in scope for
at least two major reasons.
– 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.
Cont`d---

– 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.
– A Customer Orientation: A good mission
statement reflects 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.
Mission Statement Components

– Effective Mission statement should include the

following components.
– Customers—who are the firm’s customers?
– Products or services—what are the firm’s major
products or services?
– Markets—geographically, where does the firm
compete?
– Technology—is the firm technologically current?
– Concern for survival, growth, and profitability—is the
firm committed to growth and financial soundness?
Cont`d…

– Philosophy—what are the basic beliefs, values,

aspirations, and ethical priorities of the firm?
– Self-concept—what is the firm’s distinctive
competence or major competitive advantage?
– Concern for public image—Is the firm
responsive to social, community, and
environmental concerns?
– Concern for employees—Are employees a
valuable asset of the firm?
 Vision Vs Mission

Mission Vision

Mission describes what the Vision describes what the organization

organization is now would like to become.

mission statement tells why your a vision statement tells you where you
business exists, are going. It paints a compelling word
picture of a desired future state.

Mission gives day-to-day relevance to Vision inspires stretching beyond what

may seem possible.
work

Mission occasionally changes to Visions, like dreams, will change as

become congruent with a new vision. they are fulfilled.
2.3 Business values(SB)

– A firm’s values are the beliefs, traits, and

behavioral norms that the firm’s personnel are
expected to display while undertaking activities
and pursuing the strategic vision and mission.
– In enterprises with deeply-entrenched values,
senior managers are careful to craft visions,
missions, strategies, and operating practices
that match these values, and they hold
company personnel responsible for displaying
them.
Cont`d…

– At a firm where there’s genuine commitment to the

stated values, managers connect core values to the
pursuit of its strategic vision and mission by:
Crafting a vision, a mission, a strategy, and a set of
operating practices that matches established values.
– Repeatedly emphasizing how the values-based
behavioral norms contribute to the firm’s business
success. Combining their strategic vision, mission,
and values into a single statement circulated to all
personnel (and often posting it on the firm’s Web
site).
2.4 Setting Goals and Objectives

– Some of the areas in which a corporation might

establish its goals and objectives are:
– Profitability (net profits)
– Efficiency (low costs, etc.)
– Growth (increase in total assets, sales, etc.)
– Shareholder wealth (dividends plus stock price
appreciation)
– Utilization of resources (ROE or ROI)
– Reputation (being considered a “top” firm)
– Contributions to employees (employment security, wages,
diversity)
Cont`d…

– Contributions to society (taxes paid,

participation in charities, providing a needed
product or service)
– Market leadership (market share)
– Technological leadership (innovations, creativity)
– Survival (avoiding bankruptcy)
– Personal needs of top management (using the
firm for personal purposes, such as providing
jobs for relatives)
Objectives

– Objectives are the end results of planned activity.

– They should be stated as action verbs and tell
what is to be accomplished by when and
quantified if possible.
– The achievement of corporate objectives should
result in the fulfillment of a corporation’s
mission.
– In effect, this is what society gives back to the
corporation when the corporation does a good
job of fulfilling its mission.
Cont`d…

– They Define strategies or implementation steps

to attain the identified goals.
– Unlike goals, objectives are specific,
measurable, and have a defined completion date.
– They are more specific and outline the “who,
what, when, where, and how” of reaching the
goals.
Cont`d…

– Objectives Indicates how goals are achieved.

– They Are Desirable outcomes of organizational activity.
– Are also more specific than goals.
– It is a very specific statement on what is to be done to
accomplish the mission.
– A statement of an objective makes the following clear:
– What is to be accomplished?
– How much is to be accomplished?
– By when it is to be accomplished?
– By whom it is to be accomplished?
 Cont`d….

– Examples of Goals, Objectives and Targets

– Goal: earn $20,
– Objective: sell second hand shirts for $2 each,
– Target: 10 people
– Other examples of objectives
– To achieve 10% annual growth in earning per share.
– To achieve 20% - 25% return on equity.
– For 35 parents each week with to have a 2 hour break from their children
for the next 12 months.
– Increase the number of variety research output that improve productivity
from the existing 5% to 20% by the end of 2010.
– Q; - Set Goal and target?
Characteristics of Objectives

– Objectives should be understandable:

– Objectives should be concrete and specific:-
– Better to say “Our Company plans to achieve a 12%
increase in sale” than “our company seeks to increase its
sales”.

– Objectives should be related to a time frame:

– “our company plans to increase its sales by 12% by the
end of two years”.

– Objectives should be measurable and

controllable
Cont`d…

– Objectives should be challenging:

– Objectives that are too high and too low are both de-
motivating should be set at challenging but not unrealistic
levels.

– Different objective should correlate with each

other.
– Objectives should be set within constraints.
– Internal and external environmental situations.
Goals

– Goals are general guidelines that explain what you

want to achieve in your community.
– They are usually long-term and represent global
visions such as “protect public health and safety.”
– are outcome statements that define what an
organization is trying to accomplish, both
programmatically and organizationally.
– are usually a collection of related programs, a
reflection of major actions of the organization, and
provide rallying points for managers.
 Difference between Objectives and
Goals

Goals are Objectives are

– General directions that. may – Specific and
not be measured. measurable.
– Broad. – Narrow.
– General intentions. – Precise.
– Intangible.
– Tangible.
– Abstract.
– can't be validated as is. – Concrete.
– Validated
THE END