MISSION, OBJECTIVES AND STAKEHOLDERS

 Define and construct a mission statement

 2. State features of a mission statement
 3. Explain objectives.
 4. Explain stakeholder power analysis showing
needs of each stakeholder
 5. Discuss MENDELOW’S POWER
INTEREST MATRIX
 Explain the concept of external environment
 ORGANISATIONAL MISSION
 A mission statement is a statement in writing that
describes the basic purpose of an organization
and what it is trying to accomplish.
 It outlines the broad direction that an
organization will follow and summarizes the
reasoning and values that underlie that
organization.
 The purpose of the mission statement is to
communicate to all the stakeholder groups.
 It has been described as the ‘reason for being’.
E.g. ‘To produce cars and trucks that people
will want to buy, will enjoy driving and will
want to buy again’ (Chrysler
MISSION STATEMENTS
 Different characteristics exist and are dependent upon the
purpose of the mission setting within an organisation.
 Some suggestions:

• It should be a brief statement of purpose that is easily

understandable;
– Pepsi – ‘To beat Coke’
– Fedex – ‘Absolutely, positively, overnight’;
• It may state the general areas that the business intends to
operate in;
• It is not time based;
 It should not include commercial terms;
 It should communicate with all stakeholder
groups;
 It should be flexible enough to cater for
change;
 It should reflect the distinct advantages of the
organisation;
 It should be memorable.
 Missions can:
• Have an internal or external focus
 Be designed to communicate to stakeholder

groups and act as a basis for compromise;

Different characteristics exist and are
dependent upon the purpose of Act as a
starting point for the derivation of objectives
and strategy;
• Be used as part of the brand and marketing
mix.
EXAMPLES
 Girl Guides Association
 ‘To help a girl reach her highest potential’

Comment
 In eight easily-recalled words it gets straight to

the point. It is clear and direct whilst not being

clever and flashy.
 mission statement of COT (Children of
Tomorrow a not-for-profit entity):

 To motivate people to improve the welfare of

impoverished children through collective action,
thereby enabling the children and themselves to
realise their full potential.
 The following is an extract from the mission statement
of Believer (a multinational profit-oriented entity):

 Our goal in Believer is to anticipate and respond to the

everyday needs of our customers by creating innovative and
competitive products and services which improve our
customers’ quality of life.

 Believer supports the view that sustainable development

requires economic growth, environmental protection and social
progress to be brought into line with each other.
 A further example:
 “We, the people of Du Pont, dedicate ourselves
to the work of improving life on our planet; we
have the curiosity to go further.....the
imagination to think bigger..... The conscience
to care more.....we will answer the fundamental
needs of the people that we live with to ensure
harmony, health and prosperity in the world. We
will respect nature and living things... and will
each day leave for home with conscience clear
and spirits soaring.’ from the Du Pont website
 The whole process of mission setting has been
criticized heavily as some feel that it is a waste
of scarce resources and does not produce
significant benefits that outweigh the costs.
Every business should have a mission statement
because:
it ensures that everyone in the organization is “on

the same page”.

 it serves as a benchmark for effective business

planning.
 it helps in the setting of corporate objectives.
MISSION AND OBJECTIVES

 A mission is an open-ended statement of the

firm’s purpose and strategy.
 Objectives are more
 specific and seek to translate the mission into a
series of mileposts for the organization to follow.
 Objectives are often considered to be SMART:
 Specific – clear statement, easy to understand;

 Measurable – to enable control and
communication down the organization;
 Attainable – It is pointless setting
unachievable objectives;
 Relevant – appropriate to the mission and
stakeholders;
 Timed – have a time period for achievement
KEY ISSUES:

 Objectives
 Are financial and non-financial;
 Will be multiple;
 Will conflict;
 Will vary across stakeholder groups;
 Will; need to be prioritized;
 Will drive the strategy
STAKEHOLDER ANALYSIS

 Mission and objectives need to be developed with

two sets of interests in mind:
1. the interests of those who have to carry them out
e.g. managers and staff;
 2 the interests of those who focus on the outcome

e.g. shareholders, customers, suppliers etc.

 Together these groups are known as
stakeholders – the individuals and groups
who have an interest in the organization and
as such may wish to influence its mission,
objectives and strategy.
 Given the range of interests in organizations, it
is not surprising to find that the mission may
take several months of negotiation before it is
finalized.
 The key aspect is that it takes the stakeholders
into account when formulating the mission and
objectives of the company.
 The problem is that stakeholder interests often
conflict and so an order of priority is required
based upon relative power and interest.
 The different stakeholders need to be
identified and potential for conflict needs to be
ascertained in advance.

 The mission setting process can be a useful
basis for getting the stakeholder groups to
communicate their ideas and then be able to
appreciate other viewpoints.
STAKEHOLDER POWER ANALYSIS

 This can be broken down into five steps:

 1 Identify the key stakeholders.
 2 Establish their interests and claims on the
organisation, especially as new strategic initiatives
are likely to be developed.
 3 Determine the degree of power that each group
holds through its ability to force or influence
change as new strategies are developed.
 .
 4 Consider how to divert trouble before it
starts, possibly by negotiating with key groups
in advance.
 5 Develop mission, objectives and strategy,
possibly prioritizing to minimise power
clashes. This may involve negotiation amongst
the various groups of stakeholders
STAKEHOLDER GROUPS AND POSSIBLE POWER SOURCES

 Managers
• Large or small company?
• Company performance against industry and
economy – How well is it doing
 Technical skills – are they in short supply?

• Non-executive directors? – Can they dilute or

challenge?
EMPLOYEES
 Unionised?
 Cultures?
 Skills base?
GOVERNMENT

 Laissez-faire?
 Shareholding?
 Political involvement
LENDERS

 Loan conditions?
 Amount and terms of loan?
 Non-executives? Provided by lenders?
SHAREHOLDERS
 Voting powers?
 Family influence?
 Number of shareholdings?
 Rate of change of holdings?
 Extent of staff and managers who own shares?
CUSTOMERS AND SUPPLIERS

 Power from grouping together?

 Volumes involved?
 Alternative suppliers?
 Different groups will have different influence –
each case will need to be treated in context.
 The more power and interest, the greater the
involvement in setting the mission and
strategy.
MENDELOW’S POWER INTEREST MATRIX

 Mendelow's matrix provides a way of mapping

stakeholders based on the power to affect the
organisation and their interest in doing so.
 It identifies the responses which management
needs to make to the stakeholders in the different
quadrants.
 Following categorization of stakeholders in a
manufacturing company:

Low + Low : Small customers, Small Shareholders



High + Low: Major Customers, Central Govt, Media



Low + High: Employees, Environmental Groups,

Local Community


High + High: Institutional Investors, Local Planning

Authority

STAKEHOLDER MAPPING: THE POWER INTEREST MATRIX

 Key players will be the most significant. Look to

see how many there are. The more there are, the
greater the need for compromise and the larger the
chance of conflict.
• Keep satisfied will usually leave you alone so long
as you adhere to their conditions e.g. being socially
responsible.
• Remember things change and so the keep informed
of today may be the key player of tomorrow.
MANAGING THE RELATIONSHIP WITH STAKEHOLDER GROUPS

 Powerful stakeholder groups must have confidence in

the management team of the organization.
 The organization should ensure therefore that

adequate management systems are in place.

 Some suggestions:

• Allocate organizational responsibility for the process

along with a budget;
 Use a team for a broad range of opinion and expertise;
 Establish and order the objectives of the
organization.
 Identify the areas for potential conflict and
target resources into those areas;
 Frequent face-to-face meetings with the key
player and keep satisfied groups;
 Communication processes for the other two
groups – possibly via public Q&A sessions;
 Periodic formal reporting and the use of a
website for ‘frequently asked questions