Chapter 02 business vision and mission

1. Ch.
2-1
The Business Vision & Mission
BY:MADDY.KALEEM

2. COMPREHENSIVE STRATEGIC MANAGEMENTCOMPREHENSIVE STRATEGIC MANAGEMENT
MODELMODEL
Ch.
2-2
Vision
&
Mission
Statements
External
Audit
Internal
Audit
Long-Term
Objectives
Generate,
Evaluate,
Select
Strategies
Implement
Strategies:
Mgmt Issues
Implement
Strategies:
Marketing,
Fin/Acct,
R&D, CIS
Measure &
Evaluate
Performance
BY:MADDY.KALEEM

3. VISION & MISSIONVISION & MISSION
That business mission is so rarely given adequate
thought is perhaps the most important single cause
of business frustration.
—Peter Drucker—
Ch.
2-3
BY:MADDY.KALEEM

4. VISION & MISSIONVISION & MISSION (CONT’D)(CONT’D)
 Many companies develop both
 Shared vision can motivate employees
 Develops a commonality of interests
 Helps focus on opportunity & challenge
Ch.
2-4
BY:MADDY.KALEEM

5. VISION STATEMENTVISION STATEMENT
Vision statement answers the question:
“What do we want to become?”
Ch.
2-5
BY:MADDY.KALEEM

6. VISION IS DEFINED AS THE MAIN TARGET/GOAL
THAT ANY ORGANIZATION STRIVE TO ACHIEVE IN THE
LONG TERM
Vision statement characteristics :-
 It should answer the question what do we want to
become?
 It provides the foundation for developing a
comprehensive mission
 It should be established first and foremost the mission
 It should be short (one sentence if possible ).
Participation from many managers is important in
developing the mission statement
Ch.
2-6
BY:MADDY.KALEEM

7. “our vision is to be the preferred world leader in
chemicals .”
(SABIC)
Ch 2 -7
Vision Statements examples
“ Our vision is to shape tomorrow’s
financial map as a global gateway for
capital and investment .”
Dubai International Financial Centre (DIFC)
Copyright © 2011 Pearson Education
BY:MADDY.KALEEM

8. EXAMPLESEXAMPLES (CONT’D)(CONT’D)
Vision Statement
“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.
2-8
BY:MADDY.KALEEM

9. EXAMPLESEXAMPLES
Vision Statement
“The Bellevue Hospital is the LEADER in providing
resources necessary to realize the community’s
highest level of HEALTH throughout life.”
Ch.
2-9
BY:MADDY.KALEEM

10. EXAMPLESEXAMPLES (CONT’D)(CONT’D)
Vision Statement
“It is the vision of the California Energy Commission
for Californians to have energy choices that are
affordable, reliable, diverse, safe, and
environmentally acceptable.”
Ch.
2-10
BY:MADDY.KALEEM

11. Ch 2 -11
Comprehensive
Mission Statement
Vision Statements
Clear Business
Vision
Copyright © 2011 Pearson Education
BY:MADDY.KALEEM

12. MISSION STATEMENTMISSION STATEMENT
Mission statement answers the question:
“What is our business?”
Ch.
2-12
BY:MADDY.KALEEM

13. Ch 2 -13
Mission statement is defined as a brief description of
a company's fundamental purpose. It answers the
question, "Why do we exist?"
Mission statement characteristics :
• It answers the question, “ what is our business ?
• Declares the firm’s reason for being "Why do we exist?“
• It distinguishes one firm from another
• It articulates the company's purpose both for those
in the organization and for the public.
• 90% of all companies have used a mission
statement in the previous five years.
Copyright © 2011 Pearson Education
BY:MADDY.KALEEM

14. EXAMPLESEXAMPLES (CONT’D)(CONT’D)
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.
2-14
BY:MADDY.KALEEM

15. EXAMPLESEXAMPLES (CONT’D)(CONT’D)
Mission Statement
“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.
2-15
BY:MADDY.KALEEM

16. EXAMPLESEXAMPLES (CONT’D)(CONT’D)
Mission Statement
“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 a healthy environment.”
Ch.
2-16
BY:MADDY.KALEEM

17. DEVELOPING VISION & MISSIONDEVELOPING 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.
2-17
BY:MADDY.KALEEM

18. Ch 2 -
Importance of Mission
Mission
Resource Allocation
Unanimity of Purpose
Organizational
Climate
Focal Point for Work
Structure
Benefits from a strong mission
Copyright © 2011 Pearson Education
BY:MADDY.KALEEM

19. MISSION & VISION DIFFERENCES

Focus Vision Mission
the main
Question
what do we want to
become??
What is our
business?
Scope More broader Less broader
Length Must be short
)one sentence if
possible(
More longer
Role It is the foundation of
the mission
The foundation of
objectives , plans ,
strategy ,and
policies.
Ch.
2-19
BY:MADDY.KALEEM

20. CHARACTERISTICS OF A MISSIONCHARACTERISTICS OF A MISSION
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.
2-20
BY:MADDY.KALEEM

21. CHARACTERISTICS OF A MISSIONCHARACTERISTICS OF A MISSION
(CONT’D)(CONT’D)
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.
2-21
BY:MADDY.KALEEM

22. CHARACTERISTICS OF A MISSIONCHARACTERISTICS OF A MISSION
(CONT’D)(CONT’D)
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.
2-22
BY:MADDY.KALEEM

23. CHARACTERISTICS OF A MISSIONCHARACTERISTICS OF A MISSION
(CONT’D)(CONT’D)
Effective mission statements:
• Reflect judgments re: future growth
• Provide criteria for selecting strategies
• Basis for generating & screening strategic options
• Are dynamic in orientation
Ch.
2-23
BY:MADDY.KALEEM

24. CUSTOMER ORIENTATIONCUSTOMER 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.
2-24
BY:MADDY.KALEEM

25. SOCIAL POLICY & MISSIONSOCIAL 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.
2-25
BY:MADDY.KALEEM

26. SOCIAL POLICY & MISSIONSOCIAL POLICY & MISSION (CONT’D)(CONT’D)
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.
2-26
BY:MADDY.KALEEM

27. COMPONENTS OF MISSIONCOMPONENTS 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.
2-27
BY:MADDY.KALEEM

28. COMPONENTS OF MISSIONCOMPONENTS OF MISSION (CONT’D)(CONT’D)
 Customers
 Products or services
 Markets
 Technology
 Survival, growth, and profitability
 Philosophy
 Self-concept
 Concern for public image
 Concern for employees
Ch.
2-28
BY:MADDY.KALEEM

29. COMPONENTS OF MISSIONCOMPONENTS OF MISSION (CONT’D)(CONT’D)
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.
2-29
BY:MADDY.KALEEM

30. COMPONENTS OF MISSIONCOMPONENTS OF MISSION (CONT’D)(CONT’D)
 Markets:
 “Geographically, where does the firm compete?”
 Technology:
 “Is the firm technologically current?”
Ch.
2-30
BY:MADDY.KALEEM

31. COMPONENTS OF MISSIONCOMPONENTS OF MISSION (CONT’D)(CONT’D)
 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.
2-31
BY:MADDY.KALEEM

32. COMPONENTS OF MISSIONCOMPONENTS OF MISSION (CONT’D)(CONT’D)
 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.
2-32
BY:MADDY.KALEEM

33. IMPORTANCE OF VISION & MISSIONIMPORTANCE 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.
2-33
BY:MADDY.KALEEM

34. GLOBAL PERSPECTIVEGLOBAL PERSPECTIVE
Major Challenges in 2000
Ch.
2-34
31%39%24%Incr. flexibility & speed
3%9%26%Competing for talent
38%32%28%Engaging emp. in mission
41%32%29%Reducing costs
16%42%30%Managing M&As, alliances
3%28%44%Customer loyalty
JapanEurop
e
USA
BY:MADDY.KALEEM

35. KEY TERMS & CONCEPTSKEY TERMS & CONCEPTS
Ch.
2-35
 Concern for employees
 Concern for public
image
 Concern for survival,
growth, and
profitability
 Creed statement
 Customers
 Markets
 Mission statement
 Mission statement
components
 Philosophy
 Products or services
 Self-concept
 Social policy
 Stakeholders
 Technology
 Vision statement
BY:MADDY.KALEEM