1155 Lecture 02

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Ch 2 -1

Chapter 2The Business Vision & Mission

Strategic Management:Concepts & Cases

11th Edition

Fred David

Dr. Ayham Jaaron

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Ch 2 -2

Chapter Outline

What do we want to become?

What is our business?

Importance of Vision and Mission Statements

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Ch 2 -3

Chapter Outline (contd)

Characteristics of a mission statement

Components of a mission statement

Writing & evaluating mission statements

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Ch 2 -4

The last thing IBM needs right now is avision. (July 1993)

Vision

What IBM needs most right now is avision. (March 1996)

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

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Vision

Agreement on the basic vision for which thefirm strives to achieve in the long run iscritically important to the firms success.

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Ch 2 -6

What do we want to become?

Example: A hospital vision:

to be the leader in providing resources

necessary to realize the communitys

highest level of health throughout life.

Vision

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Ch 2 -7

ComprehensiveMission Statement

Vision

Clear BusinessVision

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Vision

Vision should beformulated first andforemost.

It should answer thebasic question what

do we want to

become? Profit + vision=

workforce motivator.

Clear visionprovides basis forclear mission

statement It should be short,

preferably one

sentence, developedcollectively bymanagers.

Ch 2 -8

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Ch 2 -9

Shared Vision among managers--

Creates commonality of interests Reduce daily monotony

Provides opportunity & challenge

Vision

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Ch 2 -10

A national organization which represents its

members in all aspects of poultry on both anational and international level

Vision Statement Examples

-- U.S. Poultry & Egg Association

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Ch 2 -11

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 forothers


-- Manley Baptist Church

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Ch 2 -12

The Vision of USGS is to be a world leader

in the natural sciences through our scientificexcellence and responsiveness to societysneeds


-- U.S. Geological Survey (USGS)

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Ch 2 -13

To be the first choice in the printedcommunications business. The first choiceis the best choice, and being the bestiswhat Atlanta Web pledgesto work hard atbeingevery day!


-- Atlanta Web Printers, Inc.

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Ch 2 -14

Mission answers the question:

What is our business?

Mission Statements

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Ch 2 -15

-- 90% of all companies have used amission statement in the previous fiveyears

Mission Statements

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Ch 2 -16

Mission Statements

Enduring statement of purpose

Distinguishes one firm from another

Declares the firms reason for being

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Ch 2 -17

Mission Statements

Creed statement

Statement of purpose

Statement of philosophy

Statement of business principles

Also referred to as:

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Ch 2 -18

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Ch 2 -19

Reveal what an organization wants to be

and whom it wants to serve

Mission Statements

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Ch 2 -20

Essential for effectively establishing

objectives and formulating strategies

Mission Statements

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Ch 2 -21

Vision versus Mission

Many organizations develop both vision &mission statements

Main difference is in the questions they

answer

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Ch 2 -22

Vision & Mission

Profit & vision are necessary to effectivelymotivate a workforce

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Ch 2 -23

Vision & Mission

Shared vision creates a community of

interests

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Ch 2 -24

The Process of developingMission statements

Clear mission is needed before alternative

strategies can be formulated andimplemented

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Ch 2 -25

The process of developingVision & Mission:

Participation from diverse managers is important in developing themission

1) First, ask managers to read articles about mission statements.

2) Ask each manager to prepare a mission statement for theorganization.

3) A facilitator/ committee leader merge all these statements into asingle document.

4) Distribute this document among managers.

5) Ask managers to comment and modify on the document to adegree that each manager has inserted some input.

6) A meeting is held to gain consensus and uniform shape formission.

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Benefits of Mission formulationprocess:

The process of mission development is avery good tool to gain support from allmanagers for future strategies.

Ch 2 -26

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Ch 2 -27

It is the California Energy Commissionsmission to assess, advocate, and act through

public/private partnerships to improve energysystems that promote a strong economy andhealthy environment.

Mission Statement Examples

-- California Energy Commission

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Ch 2 -28

The Bellevue Hospital, with respect,compassion, integrity, and courage, honors the

individuality and confidentiality of our patients,employees, and community, and is progressivein anticipating and providing future health careservices.


-- The Bellevue Hospital

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Ch 2 -29

John Deere has grown and prospered througha long-standing partnership with the worldsmost productive farmers. Today, John Deere

is a global company with several equipmentoperations and complementary servicebusinesses. These businesses are closelyinterrelated, providing the company withsignificant growth opportunities and other

synergistic benefits.


-- John Deere, Inc.

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Ch 2 -30

Importance of Mission

Mission

3)Resource Allocation4) To specify firm purpose

1)To ensure Unanimity of Purpose2) To facilitate translation of objectives

into a work structure

5) Organizational Climate or tone

6) Focal point for workstructure

Benefits from a strong mission

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Ch 2 -31

Broad in scope

Generate strategicalternatives

Not overly specific

Reconciles interests amongdiverse stakeholders

Finely balanced betweenspecificity & generality

Effective Missions has the followingcharacteristics

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Arouse positive feelings &emotions

Motivate readers to action

Generate favorableimpression of the firm

Effective Missions

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Reflect future growth

Provide criteria for strategy

selection

Basis for generating &evaluating strategic options

Are dynamic in nature

Effective Missions

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Mission and Attitudes:

mission is more than a statement, it is adeclaration of organizational attitudes andoutlook.

Ch 2 -34

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Ch 2 -35

Anticipates customer needs Identifies customer needs

Provides product/service to satisfy needs

Mission & CustomerOrientation

An Effective Mission Statement --

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Ch 2 -36

Affects development of vision & mission

Responsibilities to

Consumers

Environmentalists

Minorities

Communities

Social Policy & Mission

Social policy is the responsibility of the

organization to customers, environment..etc.

Managerial philosophy shapes social policy --

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Ch 2 -37

Social Policy & Mission

Social policy should be integrated in allstrategic-management activities

Mission should convey the socialresponsibility of the firm

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2x average return on shareholders equity Positive relationship to company performance

30% higher return on certain financial measures

Vision & Mission

Research results are mixed, however,firms with formal mission statementsgenerally see a:

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Ch 2 -39

Mission

Elements

CustomersMarkets

Employees

PublicImage

Self-Concept Philosophy

SurvivalGrowthProfit

ProductsServices

Technology

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Ch 2 -40

PepsiCo Mission

PepsiCos mission is to increase the value of ourshareholders investment. We do this through sales

growth, cost controls, and wise investmentresources. We believe our commercial success

depends upon offering quality and value to ourconsumers and customers; providing products thatare safe, wholesome, economically efficient andenvironmentally sound; and providing a fair return to

our investors while adhering to the higheststandards of integrity.

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Ch 2 -41

Ben & Jerrys Mission

Ben & Jerrys mission is to make, distribute and sellthe finest quality all-natural ice cream and relatedproducts in a wide variety of innovative flavors madefrom Vermont dairy products. To operate theCompany on a sound financial basis of profitable

growth, increasing value for our shareholders, andcreating career opportunities and financial rewardsfor our employees. To operate the Company in away that actively recognizes the central role thatbusiness plays in the structure of society by initiatinginnovative ways to improve the quality of life of abroad communitylocal, national and international.

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Ch 2 -42

Mission Statement Evaluation Matrix

COMPONENTS

Organization Customers

Products

Services Markets

Concern forSurvival,Growth,

Profitability Technology

PepsiCo Yes No No Yes No

Ben & Jerry's No Yes Yes Yes No

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Ch 2 -43

Mission Statement Evaluation Matrix

COMPONENTS

Organization Philosophy Self-Concept Concern forPublic Image Concern forEmployees

PepsiCo Yes No No No

Ben & Jerry's No Yes Yes Yes

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Ch 2 -44

Key Terms & Concepts

For Review (Chapter 2)

Concern for Employees Customers

Concern for Public Image Markets

Survival, Growth, &

Profitability

Mission Statement

Components

Creed Statement Managerial Philosophy

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Ch 2 -45

Key Terms & Concepts

For Review (Chapter 2)

Self Concept Stakeholders

Social Policy Vision Statement

1155 Lecture 02

Documents

Transcript of 1155 Lecture 02