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  1. 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. 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. 3. Chapter Outline• Characteristics of a Mission Statement• Components of a Mission Statement• Writing and Evaluating Mission Statements Ch. 2-3 Fred R. David
  4. 4. Vision & MissionVision is the art of seeing things invisible-- Jonathan SwiftThe very essence of leadership is that you have to have vision. You can’t blow an uncertain trumpet.-- Theodore Hesburgh Ch. 2-4 Fred R. David
  5. 5. VisionManagement and executive agreement on the basic vision for which the firm strives to achieve in the long run is critically important. Ch. 2-5 Fred R. David
  6. 6. VisionVision statement answers the question: “What do we want to become?” Ch. 2-6 Fred R. David
  7. 7. VisionClear vision – Provides foundation for comprehensive mission statement Ch. 2-7 Fred R. David
  8. 8. Vision & Mission• Vision statement developed first• Short – preferably one sentence• Broad management involvement Ch. 2-8 Fred R. David
  9. 9. Vision StatementsThe 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 Ch. 2-9 Fred R. David
  10. 10. Vision StatementsThe 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 Fred R. David
  11. 11. Vision StatementsTo 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 Fred R. David
  12. 12. Vision StatementsIt 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 Fred R. David
  13. 13. Mission StatementsRecent Data indicate that: – 90% of all companies have used a mission statement sometime in the previous five years. Ch. 2-13 Fred R. David
  14. 14. Mission StatementsMission statement answers the question: “What is our business?” Ch. 2-14 Fred R. David
  15. 15. Mission StatementsMission Statement: – Enduring statement of purpose – Distinguishes one organization from another in similar enterprises – Declaration of an organization’s “reason for being” Ch. 2-15 Fred R. David
  16. 16. Mission StatementsMission Statements also referred to as: – Creed statement – Statement of purpose – Statement of philosophy – Statement of business principles Ch. 2-16 Fred R. David
  17. 17. Mission StatementsMission Statements – Reveal what an organization wants to be and whom it wants to serve Ch. 2-17 Fred R. David
  18. 18. Mission StatementsMission Statements – Essential for effectively establishing objectives and formulating strategies Ch. 2-18 Fred R. David
  19. 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 Fred R. David
  20. 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 Fred R. David
  21. 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 Fred R. David
  22. 22. Mission StatementsThe 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 Fred R. David
  23. 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.” Ch. 2-23 Fred R. David
  24. 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 Fred R. David
  25. 25. Mission CharacteristicsEffective 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 Fred R. David
  26. 26. Mission CharacteristicsEffective 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 Fred R. David
  27. 27. Mission CharacteristicsEffective 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 Fred R. David
  28. 28. Customer OrientationAccording 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 Fred R. David
  29. 29. Customer OrientationA 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 Fred R. David
  30. 30. Social Policy & MissionManagerial 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 Fred R. David
  31. 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 Fred R. David
  32. 32. Components of MissionMission statements vary in… Length Content Format SpecificityMust include the 9 elements, as the mission statement is the most public and visible part of the strategic-management process. Ch. 2-32 Fred R. David
  33. 33. Mission Components1. Customers2. Products or services3. Markets4. Technology5. Survival, growth, and profitability6. Philosophy7. Self-concept8. Concern for public image9. Concern for employees Ch. 2-33 Fred R. David
  34. 34. Components of MissionComponents of mission and corresponding questions to be answered:• Customers: “Who are the firm’s customers?”• Products or services: “What are the firms major products or services?” Ch. 2-34 Fred R. David
  35. 35. Components of Mission• Markets: “Geographically, where does the firm compete?”• Technology: “Is the firm technologically current?” Ch. 2-35 Fred R. David
  36. 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 Fred R. David
  37. 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 Fred R. David
  38. 38. Importance of Vision & MissionAlthough 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 Fred R. David
  39. 39. PepsiCo Mission StatementPepsiCo’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 Fred R. David
  40. 40. Ben & Jerry’s Mission StatementBen & 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 Fred R. David
  41. 41. Evaluation Matrix of Mission StatementsCOMPONENTS Concern for Survival, Products Growth, Organization Customers Services Markets Profitability TechnologyPepsiCo Yes No No Yes NoBen & Jerrys No Yes Yes Yes No Ch. 2-41 Fred R. David
  42. 42. Evaluation Matrix of Mission StatementsCOMPONENTS Self- Concern for Concern for Organization Philosophy Concept Public Image EmployeesPepsiCo Yes No No NoBen & Jerrys No Yes Yes Yes Ch. 2-42 Fred R. David
  43. 43. Key Terms & Concepts• Concern for Employees• Concern for Public Image• Concern for Survival, Growth, and Profitability• Creed Statement Ch. 2-43 Fred R. David
  44. 44. Key Terms & Concepts• Customers• Markets• Mission Statement Components• Philosophy Ch. 2-44 Fred R. David
  45. 45. Key Terms & Concepts• Self-Concept• Social Policy• Stakeholders• Vision Statement Ch. 2-45 Fred R. David