Chapter 2 The Business Vision & Mission

Chapter 2
The Business Vision & Mission
Strategic Management:
Concepts & Cases
11th Edition
Fred David
Ch 2 -1
Copyright 2007 Prentice Hall
Chapter Outline
What do we want to become?
What is our business?
Importance of Vision and Mission Statements
Ch 2 -2
Chapter Outline (cont’d)
Characteristics of a mission statement
Components of a mission statement
Writing & evaluating mission statements
Ch 2 -3
Vision
“The last thing IBM needs right now is a

vision.” (July 1993)
What IBM needs most right now is a

vision.” (March 1996)
-- Louis V. Gerstner, Jr., CEO, IBM Corporation
Ch 2 -4
Vision
Agreement on the basic vision for which the

firm strives to achieve in the long run is
critically important to the firm’s success.
Ch 2 -5
Vision
“What do we want to become?”
Ch 2 -6
Vision
“A corporate vision can focus, direct, motivate, unify, &

even excite a business into a superior performance. The job
of a strategist is to identify & project a clear vision”
John Keane
Ch 2 -7
Vision
Clear Business
Vision
Comprehensive
Mission Statement
Ch 2 -8
Vision & Mission
Shared Vision --
 Creates commonality of interests
 Reduce daily monotony
 Provides opportunity & challenge
Ch 2 -9
Vision Statement Examples
A national organization which represents its

members in all aspects of poultry and eggs
on both a national and international level
-- U.S. Poultry & Egg Association
Ch 2 -10
The Vision of Manley Baptist Church is to

be the people of God, on mission with God,
motivated by a love for God, and a love for
others
-- Manley Baptist Church
Ch 2 -11
The Vision of USGS is to be a world leader

in the natural sciences through our scientific
excellence and responsiveness to society’s
needs
-- U.S. Geological Survey (USGS)
Ch 2 -12
To be the first choice in the printed

communications business. The first choice
is the best choice, and being the best is what
Atlanta Web pledges to work hard at being—
every day!
-- Atlanta Web Printers, Inc.
Ch 2 -13
Mission Statements
-- 90% of all companies have used a

mission statement in the previous five
years
Ch 2 -14
Mission Statements
“What is our business?”
Ch 2 -15
Mission Statements
Answers the Q’s

•Tell me something about your company
•Introduce / Define your company
Ch 2 -16
Mission Statements
•What does your company do

•How does it do
•Why does it do
•Why the various stakeholders would want
to work with you
Ch 2 -17
Mission Statements
What is your business / What does your

company do. Also defined by
•Statement of purpose
•Reason of it’s existence
•Reason of its’ being
Ch 2 -18
Mission Statements
Sample Mission Statements

My company's purpose is to:
Sell shoes
Provide educational services
Grow market vegetables
Ch 2 -19
Mission Statements
How do you do it
Not looking for a detailed description of your

business's physical operations here;
But a description of your core values,
beliefs,principles and generally these would
be driving from your core competencies
Ch 2 -20
Mission Statements
Sample Values
•Provide high product quality
•Provide superior customer service
•Protect the quality of the environment
•Ensure equal access to resources
•Encourage innovation/creativity
•Practice sustainable development
Ch 2 -21
Mission Statements
Sell shoes of the highest quality
Provide educational services that allow all

children to experience learning success
Grow market vegetables using organic

sustainable farming practices
Ch 2 -22
Mission Statements
Why does it do that
This is the part that describes your spark, or
the passion behind your business.
Why does your business do what it does? For
some people, it helps to think back on why
they started their business in the first place.
What the company aspires to be
Ch 2 -23
Mission Statements
Sell shoes of the highest quality so every customer can

find a pair of shoes they actually love to wear.
Provide educational services that allow all children to

experience learning success and become life-long earners
and contributing members of our community.
Grow market vegetables using organic, sustainable

farming practices to give people safe and healthy food Ch 2 -24
choices.
Mission Statements
Why would various stakeholders work with
you
•Shareholders
•Employees / Managers
•Suppliers, creditors, distributors
•Customers
•Society / Government
Thus this statement needs to be highly visible
Ch 2 -25
Mission Statements
What markets are you serving, and what benefits do
you offer them?
Do you solve a problem for your customers? What are
you doing for your customers? Let’s hope this is
something that sets you apart, makes you different,
and that your customers will recognize.
What kind of internal work environment do you want
for your employees? What are you doing for your
employees? Fair compensation, good tools,
professional development, encouragement, or
whatever
Ch 2 -26
Mission Statements
What does the company do for its owners?

Don’t apologize for needing profits to stay
in business, or for generating return on
investment for those who invested
Ch 2 -27
Mission Statements
They define the dimensions along
which an organisation’s performance is
to be measured and judged. The most
common candidate (not surprisingly) is
profit. DuPont, for example, said that it
considered itself successful “only if we
return to our shareholders a long-term
financial reward comparable to the
better performing large industrial
companies”.
Ch 2 -28
Mission Statements
Corporations often acknowledge their
responsibility to other stakeholders as
well, mentioning their attitude to
employees (“to treat them with
respect, promote teamwork, and
encourage personal freedom and
growth”—Dow Chemical), or to
customers (“to continually exceed our
customers’ increasing expectations”—
Johnson Controls).
Ch 2 -29
Mission Statements
Thus a mission statement should, According
to Vern McGinis,
•Define what the company is
•Define what the company aspires to be
•Limited to exclude some ventures
•Broad enough to allow for creative growth
•Distinguish the company from all others
•Serve as framework to evaluate current activities. Guides
the plans & actions, spells out its overall goals, helps sets
priorities
Ch 2 -30
Copyright
• 2007 Prentice Hall
Stated clearly so that it is understood by all
Mission Statements
“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 & the purpose of the
organization make possible clear & realistic
business objectives”
Peter Drucker
Ch 2 -31
Mission Statements
•What is a business
•How do you define it
What do you expect a steel manufacturer to
tell you
Ch 2 -32
Mission Statements
•Don’t “box” yourself in.

Your mission statement should be able to withstand the
changes that come up over time in your product or service
offerings, or customer base.
A cardboard box company isn’t in the business of making
cardboard boxes; it’s in the business of providing
protection for items that need to be stored or shipped. The
broader understanding helps them see the big
picture. E.gs Notes
Ch 2 -33
Mission Statements
Don’t “box” yourself in.
•Dental Care VS Tooth Brush business
•Corning glass Co & Flat TV
•California energy commission
But Not Overly Broad So IT Does Not Exclude
Any strategy
•E.G. GuccI
Ch 2 -34
Mission Statements
•How Specific Should You Be?
Normally, the Mission Statement should
represent the broadest perspective of the
enterprise's mission.
You may want to take the approach of being

very specific. For instance, a Mission
Statement for a fictitious airline could be
worded as follows:
Ch 2 -35
Mission Statements
•Airco, Inc. will be the 'guaranteed' on-time

airline. Maintaining the most efficient
equipment in the industry, we will target a
customer base of mainly young
businessmen and offer them the lowest cost
service on the west coast, with an objective
of a 20% profit before tax and a 30% per
year revenue growth.
Ch 2 -36
Mission Statements
Or It Could Be More Broad In Scope
•Airco, Inc. will be recognized as the most
progressive enterprise in the transportation
business. We will offer our customers cost
effective transportation service within
geographical areas and market segments
that can benefit from our services and will
insure a return on investment and growth
rate consistent with current management
guidelines.
Ch 2 -37
Mission Statements
More Egs.
•PTCL VS AT&T
•OGDC VS EXXON
•Pak Railways VS Union Pacific
•Evernew Studios VS Universal studios
•Cambridge VS GAP
Ch 2 -38
Mission Statements
At The Same Time They help companies
to focus their strategy by defining
some boundaries within which to
operate
•. Federal Express, for example, has said it is
“dedicated to maximising financial returns by
providing totally reliable, competitively superior,
global air–ground transportation of high priority
goods and documents that require rapid, time-
certain delivery”. It is not, evidently, going to enter
the business of bulk shipping oil products or
semiconductors.
Ch 2 -39
Mission Statements
Also referred to as:
•Creed statement
•Statement of philosophy
•Statement of business principles
Ch 2 -40
Ch 2 -41
Mission Statement Examples
It is the California Energy Commission’s

mission to assess, advocate, and act through
public/private partnerships to improve energy
systems that promote a strong economy and
healthy environment.
-- California Energy Commission
Ch 2 -42
The Bellevue Hospital, with respect,

compassion, integrity, and courage, honors the
individuality and confidentiality of our patients,
employees, and community, and is progressive
in anticipating and providing future health care
services.
-- The Bellevue Hospital
Ch 2 -43
John Deere has grown and prospered through

a long-standing partnership with the world’s
most productive farmers. Today, John Deere
is a global company with several equipment
operations and complementary service
businesses. These businesses are closely
interrelated, providing the company with
significant growth opportunities and other
synergistic benefits.
-- John Deere, Inc.

Ch 2 -44
Importance of Mission
Benefits from a strong mission
Unanimity of Purpose
Resource Allocation
Mission
Organizational Climate
Focal point for work

structure
Ch 2 -45
Effective Missions
Broad
 Broadin
inscope
scope
Generate
Generatestrategic
strategic
alternatives
alternatives
Not
 Notoverly
overlyspecific
specific
Reconciles
 Reconcilesinterests
interestsamong
among
diverse
diversestakeholders
stakeholders
Finely
Finelybalanced
balancedbetween
between
specificity
specificity&&generality
generality
Ch 2 -46
Effective Missions
Arouse
Arousepositive
positivefeelings
feelings&&
emotions
emotions
Motivate
 Motivatereaders
readersto
toaction
action
Generate
Generatefavorable
favorable
impression
impressionof
ofthe
thefirm
firm
Ch 2 -47
Effective Missions
Reflect
 Reflectfuture
futuregrowth
growth
Provide
Providecriteria
criteriafor
forstrategy
strategy
selection
selection
Basis
Basisfor
forgenerating
generating&&
evaluating
evaluatingstrategic
strategicoptions
options
Are
 Aredynamic
dynamicin
innature
nature
Ch 2 -48
Mission & Customer
Orientation – Vern McGinnis
 Define what the organization is

 Define what it aspires to be
 Limited to exclude some ventures
 Broad enough to allow for growth
 Distinguishes firm from all others
 Stated clearly – understood by all
Ch 2 -49
Mission & Customer
Orientation
An Effective Mission Statement --
 Anticipates customer needs

 Identifies customer needs
 Provides product/service to satisfy needs
Ch 2 -50
Social Policy & Mission
Managerial philosophy shapes social policy --
 Affects development of vision & mission
 Responsibilities to –
 Consumers
 Environmentalists
 Minorities
 Communities
Ch 2 -51
Social Policy & Mission
Social policy should be integrated in all

strategic-management activities
Mission should convey the social

responsibility of the firm
Ch 2 -52
Mission Statements
2005 Rated Best in Social Responsibility
1. Fannie Mae 7. Avon Products, Inc.

2. Proctor & Gamble 8. Hewlett-Packard Co.
3. Intel Corporation 9. Agilent Technologies
4. St. Paul Companies 10. Ecolab, Inc.
5. Green Mtn. Coffee 11. Imation Corp
6. Deer & Company 12. IBM
Ch 2 -53
Vision & Mission
Research results are mixed, however,

firms with formal mission statements
generally see a:
 2x average return on shareholder’s equity
 Positive relationship to company performance
 30% higher return on certain financial measures
Ch 2 -54
Products
Services Markets
Customers
Technology
Mission
Employees
Elements
Survival
Growth
Profit
Public
Image
Self-Concept Philosophy
Ch 2 -55
PepsiCo Mission
PepsiCo’s mission is to increase the value of our

shareholders’ investment. We do this through sales
growth, cost controls, and wise investment
resources. We believe our commercial success
depends upon offering quality and value to our
consumers and customers; providing products that
are safe, wholesome, economically efficient and
environmentally sound; and providing a fair return to
our investors while adhering to the highest
standards of integrity.
Ch 2 -56
Ben & Jerry’s Mission
Ben & Jerry’s mission is to make, distribute and sell

the finest quality all-natural ice cream and related
products in a wide variety of innovative flavors made
from Vermont dairy products. To operate the
Company on a sound financial basis of profitable
growth, increasing value for our shareholders, and
creating career opportunities and financial rewards
for our employees. To operate the Company in a
way that actively recognizes the central role that
business plays in the structure of society by initiating
innovative ways to improve the quality of life of a
broad community—local, national and international.
Ch 2 -57
Mission Statement Evaluation Matrix
COMPONENTS
Organization Customers Products Markets Concern for Technology

Services Survival,
Growth,
Profitability
PepsiCo Yes No No Yes No
Ben & Jerry's No Yes Yes Yes No
Ch 2 -58
Mission Statement Evaluation Matrix
COMPONENTS
Organization Philosophy Self- Concern for Concern for

Concept Public Image Employees
PepsiCo Yes No No No
Ben & Jerry's No Yes Yes Yes
Ch 2 -59
For Review (Chapter 2)
Key Terms & Concepts
Concern for Employees Customers
Concern for Public Image Markets
Survival, Growth, & Mission Statement

Profitability Components
Creed Statement Managerial Philosophy
Ch 2 -60
For Review (Chapter 2)
Key Terms & Concepts
Self Concept Stakeholders
Social Policy Vision Statement
Ch 2 -61

Chapter 2 The Business Vision & Mission

Încărcat de

Informații document

Descriere originală:

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Chapter 2 The Business Vision & Mission

Încărcat de

Drepturi de autor:

Formate disponibile

Chapter 2

The Business Vision & Mission

What do we want to become?

What is our business?

Importance of Vision and Mission Statements

Characteristics of a mission statement

Components of a mission statement

Writing & evaluating mission statements

“The last thing IBM needs right now is a

What IBM needs most right now is a

-- Louis V. Gerstner, Jr., CEO, IBM Corporation

Agreement on the basic vision for which the

“What do we want to become?”

“A corporate vision can focus, direct, motivate, unify, &

 Provides opportunity & challenge

A national organization which represents its

-- U.S. Poultry & Egg Association

The Vision of Manley Baptist Church is to

-- Manley Baptist Church

The Vision of USGS is to be a world leader

-- U.S. Geological Survey (USGS)

To be the first choice in the printed

-- Atlanta Web Printers, Inc.

-- 90% of all companies have used a

“What is our business?”

Answers the Q’s

•What does your company do

What is your business / What does your

Sample Mission Statements

Not looking for a detailed description of your

Provide educational services that allow all

Grow market vegetables using organic

Sell shoes of the highest quality so every customer can

Provide educational services that allow all children to

Grow market vegetables using organic, sustainable

What does the company do for its owners?

“A business is not defined by its name,

•Don’t “box” yourself in.

You may want to take the approach of being

•Airco, Inc. will be the 'guaranteed' on-time

Also referred to as:

It is the California Energy Commission’s

-- California Energy Commission

The Bellevue Hospital, with respect,

-- The Bellevue Hospital

John Deere has grown and prospered through

-- John Deere, Inc.

Benefits from a strong mission

Focal point for work

 Define what the organization is

An Effective Mission Statement --

 Anticipates customer needs

Managerial philosophy shapes social policy --

 Affects development of vision & mission

Social policy should be integrated in all

Mission should convey the social

1. Fannie Mae 7. Avon Products, Inc.

Research results are mixed, however,

PepsiCo’s mission is to increase the value of our

Ben & Jerry’s mission is to make, distribute and sell

Organization Customers Products Markets Concern for Technology

PepsiCo Yes No No Yes No