strategic Management

1. Chapter 2
The Business Mission
Strategic Management:
Concepts and Cases. 9th edition
Fred R. David
PowerPoint Slides by
Anthony F. Chelte
Western New England College
Ch. 2-1
Fred R. David

2. Chapter Outline
• What Do We Want to Become?
• What Is Our Business?
• Importance of Vision and Mission
Statements
Ch. 2-2
Fred R. David

3. Chapter Outline
• Characteristics of a Mission Statement
• Components of a Mission Statement
• Writing and Evaluating Mission
Statements
Ch. 2-3
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4. Vision & Mission
Vision is the art of seeing things invisible
-- Jonathan Swift
The very essence of leadership is that
you have to have vision. You can’t
blow an uncertain trumpet.
-- Theodore Hesburgh
Ch. 2-4
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5. Vision
Management and executive agreement on
the basic vision for which the firm strives
to achieve in the long run is critically
important.
Ch. 2-5
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6. Vision
Vision statement answers the question:
“What do we want to become?”
Ch. 2-6
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7. Vision
Clear vision
– Provides foundation for comprehensive
mission statement
Ch. 2-7
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8. Vision & Mission
• Vision statement developed first
• Short – preferably one sentence
• Broad management involvement
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9. Vision Statements
The Vision of the National Pawnbrokers
Association is to have complete and
vibrant membership that enjoys a
positive public and political image and
is the focal organization of all pawn
associations.
--National Pawnbrokers Association
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10. Vision Statements
The Bellevue Hospital is the LEADER in
providing resources necessary to
realize the community’s highest level of
HEALTH throughout life.
--The Bellevue Hospital
Ch. 2-10
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11. Vision Statements
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. 2-11
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12. Vision Statements
It is the vision of the California Energy
Commission for Californians to have
energy choices that are affordable,
reliable, diverse, safe, and
environmentally acceptable.
--California Energy Commission
Ch. 2-12
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13. Mission Statements
Recent Data indicate that:
– 90% of all companies have used a mission
statement sometime in the previous five
years.
Ch. 2-13
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14. Mission Statements
Mission statement answers the question:
“What is our business?”
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15. Mission Statements
Mission Statement:
– Enduring statement of purpose
– Distinguishes one organization from
another in similar enterprises
– Declaration of an organization’s “reason for
being”
Ch. 2-15
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16. Mission Statements
Mission Statements also referred to as:
– Creed statement
– Statement of purpose
– Statement of philosophy
– Statement of business principles
Ch. 2-16
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17. Mission Statements
Mission Statements
– Reveal what an organization wants to be
and whom it wants to serve
Ch. 2-17
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18. Mission Statements
Mission Statements
– Essential for effectively establishing
objectives and formulating strategies
Ch. 2-18
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19. Vision and Mission
• Many organizations develop both vision
and mission statements
• Profit and vision are necessary to
effectively motivate a workforce
• Shared vision creates a commonality of
interests
Ch. 2-19
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20. Developing Vision & Mission
• Clear mission is needed before
alternative strategies can be formulated
and implemented
• Important to have as broad range of
participation as possible among
managers in developing the mission
Ch. 2-20
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21. Mission Statements
Mission Statement
“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.”
Ch. 2-21
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22. Mission Statements
The Mission of USGS is to serve the Nation by
providing reliable scientific information to
• Describe and understand the Earth;
• Minimize loss of life and property from natural
disasters;
• Manage water, biological, energy, and mineral
resources; and enhance and protect our quality
of life.
Ch. 2-22
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23. Mission Statements
“It is the California Energy Commission’s
mission to assess, advocate, and act
through improve energy systems that
promote a strong economy and a healthy
environment.”
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24. Importance of Mission
• Unanimity of purpose within the organization
• Basis for allocating resources
• Establish organizational climate
• Focal point for direction
• Translate objectives into work structure
• Cost, time and performance parameters
assessed and controlled
Ch. 2-24
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25. Mission Characteristics
Effective mission statements:
• Broad in scope
• Generate range of feasible strategic
alternatives
• Not excessively specific
• Reconcile interests among diverse
stakeholders
• Finely balanced between specificity &
generality
Ch. 2-25
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26. Mission Characteristics
Effective mission statements:
• Arouse positive feelings and emotions
• Motivate readers to action
• Generate the impression that firm is
successful, has direction, and is worthy of
time, support, and investment
Ch. 2-26
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27. Mission Characteristics
Effective mission statements:
• Reflect judgments re: future growth
• Provide criteria for selecting strategies
• Basis for generating & screening strategic
options
• Are dynamic in orientation
Ch. 2-27
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28. Customer Orientation
According to Vern McGinnis, mission should:
• Define what the organization is
• Define what the organization aspires to be
• Limited to exclude some ventures
• Broad enough to allow for creative growth
• Distinguish the firm from all others
• Serve as framework to evaluate current
activities
• Stated clearly so that it is understood by all
Ch. 2-28
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29. Customer Orientation
A good mission statement reflects the
anticipations of customers.
• Identify customer needs
• Provide product/service to satisfy needs
 AT&T’s mission focuses on communications, not
telephones
 Exxon’s mission focuses on energy, not on oil
and gas
Ch. 2-29
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30. Social Policy & Mission
Managerial philosophy and thinking at the
highest levels in the organization reflect
social policy.
• Affects development of vision & mission
• Responsibilities to consumers,
environmentalists, minorities,
communities, & other groups
Ch. 2-30
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31. Social Policy & Mission
• Social policy should be integrated in all
strategic-management activities.
• Mission statement is an effective
instrument for conveying the social
responsibility of the firm.
Ch. 2-31
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32. Components of Mission
Mission statements vary in…
 Length
 Content
 Format
 Specificity
Must include the 9 elements, as the mission
statement is the most public and visible part of
the strategic-management process.
Ch. 2-32
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33. Mission Components
1. Customers
2. Products or services
3. Markets
4. Technology
5. Survival, growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees
Ch. 2-33
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34. Components of Mission
Components of mission and corresponding
questions to be answered:
• Customers:
“Who are the firm’s customers?”
• Products or services:
“What are the firm's major products or
services?”
Ch. 2-34
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35. Components of Mission
• Markets:
“Geographically, where does the firm
compete?”
• Technology:
“Is the firm technologically current?”
Ch. 2-35
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36. Components of Mission
• Concern for survival, growth, and
profitability:
“Is the firm committed to growth and
financial soundness?”
• Philosophy:
“What are the basic beliefs, values,
aspirations, and ethical priorities of the
firm?”
Ch. 2-36
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37. Components of Mission
• 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?”
Ch. 2-37
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38. Importance of Vision & Mission
Although research results are mixed, firms with
formal mission statements…
• 2X average return on shareholder’s equity
• Positive relationship to organizational performance
• 30% higher return on certain financial measures
Ch. 2-38
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39. PepsiCo Mission Statement
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. 2-39
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40. Ben & Jerry’s Mission Statement
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. 2-40
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41. Evaluation Matrix of Mission Statements
COMPONENTS
Concern for
Survival,
Products Growth,
Organization Customers Services Markets Profitability Technology
PepsiCo Yes No No Yes No
Ben & Jerry's No Yes Yes Yes No
Ch. 2-41
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42. Evaluation Matrix of Mission Statements
COMPONENTS
Self- Concern for Concern for
Organization Philosophy Concept Public Image Employees
PepsiCo Yes No No No
Ben & Jerry's No Yes Yes Yes
Ch. 2-42
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43. Key Terms & Concepts
• Concern for Employees
• Concern for Public Image
• Concern for Survival, Growth, and
Profitability
• Creed Statement
Ch. 2-43
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44. Key Terms & Concepts
• Customers
• Markets
• Mission Statement Components
• Philosophy
Ch. 2-44
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45. Key Terms & Concepts
• Self-Concept
• Social Policy
• Stakeholders
• Vision Statement
Ch. 2-45
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