COMPANY VISION, MISSION

STATEMENTS By. N.Dushanthini

OUTLINE

 What is vision, mission, goals, objectives and strategy?

 Core ideology and envisioned future
 Mission and organisation performance
KEY STRATEGIC MANAGEMENT
QUESTIONS
 What kind of business should we become?
 Are we in the right fields?
 Are there new competitors?
 What strategies should we pursue?
 How are our customers changing?
THE NEW BUSINESS
ENVIRONMENT
CHARACTERISTICS OF A
WORLD-CLASS ORGANISATION
 STRATEGY FORMULATION
Phase 1: What is the company doing now ?
 Identify current strategy
 Identify assumptions

Phase 2: What is happening in the environment?

 Identify key factors for success and failure in the industry
 Identify capabilities and limitations of competitors
 Identify likely government and societal changes
 Identify company’s strengths and weakness relative to competitors

Phase 3: What should the company do next?

 Compare present strategy to environmental situation
 Identify alternative course of action
 Choose best alternative
STRATEGY

Strategy is the determination of basic long term goals of an enterprise, and the
adoption of courses of action and the allocation of resources necessary for
carrying out these goals (Chandler, 1962, p.13).

Strategy is a broad formula for how a business is going to compete what its goals
should be, and what policies will be needed to carry out these goals (Porter)
Chandler, A.D. (1962). Strategy and structure, Cambridge, MA: MIT Press
LEVELS OF STRATEGY
Corporate
What direction are we going and what business(es) are we in or do
we want to be in?

Business/ Competitive:
How are we going to compete in our chosen
business(es)?

Functional
What resources and capabilities do we
have to support the corporate and
competitive strategies?
 WHO DOES STRATEGY?
 The Role of the Board of Directors
 Elected representatives of the company’s stockholders
 Legally obligated to represent and protect stockholder’s rights
 The Role of Top Management
 Responsible for decisions and action of every employee
 Providing effective leadership
 Other Organisational Employees
 Implement— put the strategies into action and monitor performance
 Evaluate—do the actual evaluations and take necessary actions
 WHO IS ON THE BOARD OF
DIRECTORS?
Chairman of the board
Chief Executive officer (CEO)
President/GM
Chief Operating officer (COO)/GM
Other C’s
Chief Financial officer
Chief Information officer
Inside board members
Outside board members
THE ROLE OF TOP
MANAGEMENT

Determining
Organisational
M ission / V ision

Establishing Exploiting a nd
Appropriately Maintaining
Balanc ed Controls Core
Competencies

Effective
Strategic
Leadersh ip
Developing
Emphasizing H u m a n Capital
Ethical Decisions
a nd Practices Creating a nd
Sustai ni ng Strong
Organisational Culture
STRATEGIC MANAGEMENT PRINCIPLE

Effective strategy-making begins with a vision of where the

organisation needs to head!
VISION

Vision is a mental perception of the kind of environment an individual, or an

organisation, aspires to create within a broad time horizon (El-Namaki,
1992).
Vision is the statement about a company's long term direction
This is like a dream to the future. It addresses the fundamental question of
“where do we want to be.”
El-Namaki, M.S.S (1992), Creating a corporate vision, Long Range Planning,
25(6), 25-29
BUSINESS VISION STATEMENT
A statement that clearly defines the firm’s where we are going.
“What do we want to become?”
🞑 Should significantly stretch the resources and capabilities of the firm
🞑 Should inspire people in the organisation to achieve things they never
thought possible
🞑 Should unite people in the organisation toward the pursuit of one common
goal
BUSINESS VISION STATEMENT

 Vision is built on the foundation of the organisation’s values and beliefs

 Those things that are fundamentally important
 Examples: customer service, emphasis on quality, focus on integrity and ethics
 Vision elaborates a purpose
 Vision explains what the organisation does
 Vision specifies goals and guides actions
WHY A VISION ?
 A need to control an organisation's destiny - vision has an ability to control
the firm destiny and to affirm a sense of direction
 Need for creative strategies - the essence of vision is that organisations
must create rather than merely react
 Demand of recovery
 Need for a change in corporate culture
 ARTICULATING A VISION
Companies that enduring Success have core values and a
core purpose that remain fixed.
Core ideology
Envisioned future

Truly great companies understand the difference between

what should never change and what should open to change
CORE IDEOLOGY
 Enduring character of an organisation ( e.g. a dedication to affordable
quality and reliability)
 Leaders die, products become obsolete, market change, new technologies
emerge, and management fads come and go but.....
 Core ideology in a great company endures as a source of guidance and
inspiration
CORE IDEOLOGY
Two parts
 Core values – a system of guiding principles and tenets
 Core purpose – the organisation’s most fundamental reason for
existence.

Companies tend to have only a few core values

There is no universally right set of core values

CORE VALUES
 Require no external justification
 Have intrinsic value that important to insiders
 Stem from the founder’s inner belief
Company Core values
Merck Corporate Social Responsibility Honesty and
integrity

Philip Morris The right to freedom to choice Encouraging

individual initiative

Sony Being a pioneer – not following others: doing the

impossible
CORE PURPOSE

 Organisation reason for being

 This guides and inspire the organisation
 This not simply describes the firm output
Company Core purpose
3M To solve unsolved problems innovatively

Wal-Mart To give ordinary folk the chance to buy the same

things as rich people
Walt Disney To make people happy
EXAMPLES OF VISION STATEMENT

 General Motors’ vision is to be become the world’s most valued automotive

company.
 Bank of Ceylon : To be the nation's preferred bank with a strong global
presence providing customer centric innovative financial solutions
 Seylan Bank : "To be Sri Lanka's leading financial services provider - as
recognized by all our stakeholders.
EXAMPLES OF VISION STATEMENT

 Commercial Bank : "To be the most technologically advanced, innovative and

customer friendly financial services organisation in Sri Lanka, poised for further
expansion in South Asia.”
 NDB : The driving force for a financially empowered Sri Lanka
 People’s Bank : To be recognized as Sri Lanka’s undisputed market leader
for financial services.
DAVID PACKARD …..1960

I want to discuss why a company exists in the first place. In other words, why are
we here? I think many people assume, wrongly, that a company exists simply to
make money. While this is an important result of a company’s existence, we
have to go deeper and find the real reasons for our being. As we investigate
this, we inevitably come to the conclusion that a group of people get together
and exist as an institution that we call a company so they are able to
accomplish something collectively that they could not accomplish separately-
they make a contribution to society a phrase which sounds trite but is
fundamental…Your can look around [in the general business world and] see
people who are interested in money and nothing else, but the underling drivers
come largely from a desire to do something else; to make a product, to give a
service – generally to do something which is of value.
CORE PURPOSE
 One powerful method for getting at purpose is five
whys.
 Maximise shareholders wealth is not a....
Why
It does not inspire people at all levels of an organization

When people in great organisations talk their achievements they say very little
about EPS
ENVISIONED FUTURE

What we aspire to become – something that will require significant change and
progress to attain
Envision is somewhat paradoxical
Big, Hairy, Audacious Goals (BHAG) – a clearly articulated goals
Vivid description – specific deception of what it will be like to achieve the BHAG
VISION TO FOCUS

 Vision provides a direction

 Direction provides a confidence
 Confidence provides an urgency
 Urgency provides a focus
WHAT MAKES A GOOD VISION

 Be realistic and feasible, and simple and clear

 Provide a challenge for the whole organization
 Be far but close in terms of time span and organizational commitment
 Able to focus the attention with respect to scope and time
 Endorsed and frequently articulated by top management
 Derived from a sense of direction
WHAT KILLS A VISION
 Fear to mistakes
 Inability to tolerate ambiguity
 Preference for judging ideas instead of creating them
 Lack of access to areas of imagination
 Inability to “sleep on it”
 Lack of top management commitment
 Weakly communicated
 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
VISION TO MISSION

Clear Business
Vision

Comprehensive
Mission Statement
MISSION

 Fundamentally, a mission must answer the questions of why a company

exists, what is it purpose/ business, and what should it be What is our
business

 A mission statement may be presented under a maze of labels including

“creed statement”, “statement of purpose”, “statement of philosophy” or a
statement “defining our business”
MISSION STATEMENT
 The mission statement of an organisation is normally short, to the point, and
contains the following elements:
🞑Provides a concise statement of why the organisation exists, and
what it is to achieve;
🞑 States the purpose and identity of the organisation;
🞑Describes how the organization will serve those affected by its
work.
“What is our business?”
MISSION STATEMENT

Two school of thought

 The ‘strategy’ school of thought describes mission in terms of business strategy
and views it as a strategic tool, an intellectual discipline which defines the
company’s commercial rationale and target market (Horn, 1998). The mission
statement is perceived as the first step in strategic management, answering two
fundamental questions: What is our business? and What should it be?
MISSION STATEMENT
 The ‘philosophy and ethical’ school views mission as the cultural ‘glue’ which
enables an organization to function as collective unity (Horn,1998).
 This cultural glue consists of strong norms and values that influence the way in
which people behave, how they work together and how they pursue the goals
of the organization.
ROLES OF THE MISSION STATEMENT

 To provide a basis for consistent planning decisions

 To assist in translating purposes and direction into objectives suitable for
assessment and control
 To provide a consistent purpose between different interest group
connected to the organisation
 To establish organisational goals and ethics
 To improve understanding and support from key groups outside the
organisation
Source: Hooley, G.J., Cox, A.J. & Adams, A. (1992). Our five year mission: To boldly go which no man has gone before” Journal of Marketing Management 8, 35-48
DRIVERS THAT PROMOTE THE
DEVELOPMENT OF MISSION STATEMENT
Bart (1997) found six drivers
providing a common purpose,

defining the business scope,

setting behavior standards,

helping employees’ identity with the company,

creating shared values, and

inspiring employees
PRIMARY OBJECTIVES OF MISSION
STATEMENTS

Bartkus et al. (2000) contend that

making a public declaration of the company’s direction,

stating where the company is headed;

providing a control mechanism by identifying boundaries that prevent a

company from engaging in unrelated or inappropriate business activities;

assisting employees in making non-routine decisions by expressing the

company’s values; and

motivating and inspiring employees by creating a shared sense of purpose
STRATEGIC VISION VS. MISSION

 A strategic vision concerns a  The mission statement of a firm

firm’s future business path focuses on its present business
purpose - “who we are and
- “where we are goingF
what we doF
🞑 Markets to be pursued
🞑 Current
product and service
🞑 Future product/market/
offerings
customer/technology focus
🞑 Customer needs being served
🞑 Kind of company management is
🞑 Technological and business
trying to create
capabilities
EXAMPLES OF MISSION STATEMENT

BOC - To provide highly efficient, customer focused, technologically

sophisticated, resilient and innovative financial services to the nation with global
access, empowering employees and enhancing value to the stakeholders
NDB - To be the catalyst in the financial services industry by creating superior
shareholder value and contributing to the national development through the
empowerment of individuals with innovative financial solutions delivered by an
inspired and dedicated team committed to excellence.
COMPONENTS OF MISSION
STATEMENT
 Target customers and the markets - Who are the specific customers or
clients organisation intended to serve
 Principal products or services - what are the specific products or services that
organisation intends to provide to the target clients
 Geographic domain - Does the organisation recognise a geographical limits to
the clients it intends to serve?
 Core technologies - Does the organisation intend to concentrate its efforts into
a particular technology
COMPONENTS …

 Concern for survival, growth, and profitability - are there particularly

important and fundamental accomplishments that must take place to ensure
organisational survival in the specific organisational environment
 Company philosophy - Does the organisation have a particular
philosophy that accounts for its distinctiveness
 Company self-concept - Does the organisation have a concept of itself
that should be conveyed or stakeholders
 Desired public image - is there an image that those inside the organisation
want to convey to the public
COMPONENTS - EXAMPLES
We believe our first responsibility is to the doctors,
nurses, and
Custom patients, to mothers and all others who use our products and services. (Johnson &
ers Johnson)
To anticipate and meet market needs of farmers, ranchers, and rural communities within North America. (CENEX)

AMAX’s principal products are coal, iron ore, or Service copper, lead, zinc, petroleum and natural gas, potash, phosphates, nickel,
Produ tungsten, silver, gold, and magnesium. (AMAX)
ct

We are dedicated to the total success of Corning Glass Works as a worldwide competitor. (Corning Glass)
Marke
ts
Control Data is in the business of applying micro-electronics and computer technology in two general areas: computer related
hardware; and computing-enhancing services, which include computation, information, education and finance. (Control Data)
Technol
ogy
 COMPONENTS - EXAMPLES
Concern for survival The company will conduct its operations prudently, and will provide the profits and growth which will assure Hoover’s ultimate
success. (Hoover Universal)

Philosophy
We are committed to improve health care throughout the world. (Baxter
Travenol)

Self-Concept We are responsible to the communities in which we live and Public Image
work and to the world community as well. (Johnson & Johnson)

Concern for We must be responsive to the broader concerns of the public including
Public Image especially the general desire for improvement in the quality of life, equal
opportunity for all, and the constructive use of natural resources. (Sun
Company)
MISSION STATEMENTS ….
Their research found that
 Nearly all of the mission statements included the “ “concern for survival”
and “desired public image” components
 Mission statement omit discussions of “core technology” and
“geographic domain”
 “Corporate philosophy”, “self-concept” and “public image” are specially
important components to include in an organisational mission statement.
STEPS IN DEVELOPING A
MISSION STATEMENTS
Orientation
 Create a Strategic StrategicPlanning TaskForce
 Review the Planning Process
 Review Mission Statement Significance in Strategic Planning

 Review MS development process

Component Analysis
 Identify desired components
 Draft components
MS including derived
STEPS IN DEVELOPING A MISSION
STATEMENTS
Communication Analysis ( Denotative Analysis)

(Readability)
 Write clear and
 Comput concise
Fog Index
e if
 Rewrite
Connotative necessary
Analysis
 Identify connotative feelings desire
from reading MS d
 Administ Questionnaire user
er to s
(readers)
 Rewrite if necessary
READABILITY
 Compute the number of words
 Compute the number of sentences

 Compute the average number of words per sentence (Item1divided by item 2)

 Compute the number of hard words (Treat as hard words all words of three or more

syllables, abbreviations and symbols. Do not count capitalized words, unless

symbolized or abbreviated.)
 Compute the number of hard words per 100 words (Item 4 divided

byItem1times100)
 Compute the sum of the word average and the hard word percent (Item3 plus Item

5)

 Compute The Fog Index Which Indicates The Readability Level (Item 6
multiplied by 0.4)
GOALS

Goals is an open ended statement of what one want to accomplish with no

quantification of what is to be achieved and no time criteria for completion
“increased profits”
STRATEGIC GOALS
Profitability
Efficiency
Growth
Shareholders wealth
Utilisation of resources
Market leadership
Technological leadership
Contribution to employees
OBJECTIVES
 Objectives are the end results of the planed activity. They state what is to be
accomplished by when and should be quantified if possible.
 To achieve 10% of annual growth in earnings per share
 To achieve 25% return on capital employed.
SETTING
STRATEGIC
When setting the objectives, followings

OBJECTIVES
are important
 A precise formulation of the
attributes sought
 A measure for progress towards the
attributes
 A target to be achieved
 A time frame in which it is to be
achieved
Setting strategic objectives….
Another way of looking this

 Specific - unambiguous in what is to be achieved

 Measurable - specified as a quantity
- within reach
 Attainable
-
appropriate to the mission of the firm
 Relevant
 Time- bound - with a complete date
WHAT IS A STRATEGIC PLAN?
Where is headed - Strategic vision and business mission

Short and long term performance targets - Strategic and financial

objectives

Action approaches to achieve targeted results - A comprehensive

strategy
 CRAFTING A STRATEGY
 Strategy involves determining whether to
 Concentrate on a single business or several businesses (diversification)
 Cater to a broad range of customers or focus on a particular niche
 Develop a wide or narrow product line
 Pursue a competitive advantage based on
 Low cost or
 Product superiority or
 Unique organisational capabilities