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Chapter 2
     The Business Vision & Mission

Strategic Management:
    Concepts & Cases
      10th Edition
      Fred David

       PowerPoint Slides by
          Va Siheng, MBA.
National University of Management




                                    1
Chapter Outline

•   Value
•   Vision statement
•   Mission statement
•   Goal and objective




                         2
“Management’s job is not to see
 the company as it is….but as it
        can become.”
John W. Teets
                    “Quote”




                         3
I-Corporate Values

• Corporate values are the underlying principles
  which guide and also drive the actions and
  activities of individual companies.
  – A set of principles that further clarifying
    what we stand for.
  – A compass for individual and collective
    behavior.
  – A clarification of what we are prepared to
    be judged on by audiences.


                                    4
I-Corporate Values
Each company or organization has their own set
  of values.
• “Heart and Soul” of the organization
  – Performance
  – Reputation

• Endure throughout the life of the organization.




                                     5
Developing a Corporate Values



   • Question:     What values or beliefs
     do you want to represent your
     company?
   • Facilitator selected top managers and
     key personnel to complete values
     form.
   • Brainstorming Exercise
   • Final agreement by consensus on the
     best values to represent company.


                                6
VALUES SELECTION FORM
Accountability                 Innovation                     Social
                                                              Responsibility
Commitment                     Leadership                     Speed

Creativity                     Loyalty                        Teamwork

Customer Service               Multi-Cultural                 Technology

Dependability                  Partnership                    Transparency

Equality                       Privacy                        Trust

Entrepreneurial                Progressive                    Unique

Excellence                     Quality                        Other Values:

Freedom                        Reliability

Honesty                        Safety

Source: William Bean, Strategic Planning That Makes Things Happen, p. 101.
                                                                       7
Important values


              Customers


        Management & Employees


             Living values



                             8
II- Vision statement

 Agreement on the basic vision for which the
   firm strives to achieve in the long run is
   critically important to the firm’s success.



    “What do we want to
    become?”


                                     9
Vision & Mission



         Clear Business
             Vision


                       Comprehensive
                      Mission Statement




                              10
Vision & Mission
Many organizations develop both vision &
mission statements.
Vision statement--
     • Should be established first and foremost
     • Short – preferably one sentence
     • Broad management involvement




                                      11
Vision Statement Examples


National Pawnbrokers Association: “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
                                       (npa.ploygon.net)


                                          12
Vision Statement Examples



 The Bellevue Hospital: “Is the LEADER in
 providing resources necessary to realize the
 community’s highest level of HEALTH
 throughout life”.

                  -- U.S POULTRY & EGG Association



                                      13
III- Mission statement

 -- 90% of all companies have used a mission
    statement in the previous five years.


 “What is our business?”

    •Enduring statement of purpose
    •Distinguishes one firm from another
    •Declares the firm’s reason for being

                                       14
Mission Statements

Also referred to as:

       •Creed statement
       •Statement of purpose
       •Statement of philosophy
       •Statement of business principles




                                     15
Mission Statements


 Reveal what an organization wants to
 be and whom it wants to serve




  Essential for effectively establishing
  objectives and formulating strategies.



                                  16
Vision & Mission


Many organizations develop both vision &
mission statements.

   It can be argued that
   profit, not mission or
            vision.



                                17
Vision & Mission

Profit & vision are necessary to effectively
motivate a workforce




        Shared Vision --
           – Creates commonality of interests
           – Reduce daily monotony
           – Provides opportunity & challenge
                                     18
Developing Vision & Mission

Clear mission is needed before alternative
strategies can be formulated and
implemented



   Participation from diverse
   managers is important in
    developing the mission.



                                 19
Developing Vision & Mission
  Approach to developing --
    – Select several articles about vision or
      mission
    – Read as background information
    – Ask to prepare a draft statement
    – A facilitator merge into document
    – Request for modifications, Additions,
      and deletions
    – Revise the document
  • Reach final agreement by consensus on
    vision or mission of the company.
                                    20
Mission Statement Examples


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



                                       21
Mission Statement Examples
Microsoft: “Since its inception in 1975,
  Microsoft’s mission has been to create
  software for the personal computer that
  empowers and enriches people in the
  workplace, at school and at home.”


Coca-Cola: “As the world’s largest beverage
  company, we refresh the world. We do this by
  developing superior soft drinks, both
  carbonated and non-carbonated, and profitable
  non-alcoholic beverage systems that create
  value for our company, our bottling partners
  and our customers.”
                                     22
Importance of Mission

 Benefits from a strong mission


                        Unanimity of Purpose


                         Resource Allocation
      Mission
                        Organizational Climate


                        Focal point for work
                              structure


                                       23
Effective Missions


                 Broad in scope
                 Broad in scope

                 Generate strategic
                  Generate strategic
                 alternatives
                  alternatives

                 Not overly specific
                 Not overly specific

                 Reconciles interests among
                 Reconciles interests among
                 diverse stakeholders
                 diverse stakeholders
                 Finely balanced between
                  Finely balanced between
                 specificity & generality
                  specificity & generality



                                         24
Effective Missions




                Arouse positive feelings &
                 Arouse positive feelings &
                emotions
                 emotions

                Motivate readers to action
                Motivate readers to action

                Generate favorable
                 Generate favorable
                impression of the firm
                 impression of the firm




                                          25
Effective Missions




                Reflect future growth
                Reflect future growth

                Provide criteria for strategy
                 Provide criteria for strategy
                selection
                 selection

                Basis for generating &
                 Basis for generating &
                evaluating strategic options
                 evaluating strategic options
                Are dynamic in nature
                Are dynamic in nature




                                           26
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



                                         27
Mission & Customer
Orientation

 An Effective Mission Statement --


 • Anticipates customer needs
 • Identifies customer needs
 • Provides product/service to satisfy needs




                                     28
Vision & Mission

 Research results are mixed, however,
 firms with formal mission statements --

 • 2x average return on shareholder’s equity
 • Positive relationship to company
   performance
 • 30% high return on certain financial
   measures



                                       29
Products
                 Services        Markets
  Customers




                                           Technology

                      Mission
Employees
                      Elements

                                            Survival
                                            Growth
                                             Profit
  Public
  Image
              Self-Concept   Philosophy




                                             30
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.

                                      31
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.
                                       32
Mission Statement Evaluation
              Matrix
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




                                                         33
Mission Statement Evaluation
              Matrix
COMPONENTS



                               Self-    Concern for         Concern for
  Organization   Philosophy   Concept   Public Image        Employees




PepsiCo             Yes         No          No                  No


Ben & Jerry's       No         Yes          Yes                Yes




                                                       34
                                                                                        
                                                                                          




THE AEROSPACE CORPORATION 
                           -- VISION --
   To be the world's leader in the application of space technology.  



                         -- MISSION --
 To apply our technical knowledge and expertise to enable our
 customers to successfully exploit the full potential of space and
                       space technology.

                         -- VALUES --
             Integrity - Technical Excellence - Objectivity
     Dedication to Mission Success - Commitment to Our People.



                                                                  35
NORTHWEST AIRLINES
The VISION of Northwest Airlines : To build together the world's most
preferred airline with the best people; each committed to exceeding our
customers' expectations every day.
Our MISSION: The people of Northwest Airlines will provide reliable,
convenient and consistent air transportation that meets or exceeds
customer expectations and earns a sustainable profit.
Our VALUES: Northwest has eight essential values or standards that
Northwest people are expected to uphold.
                  Safety first
                  Honesty and integrity
                  Trustworthiness
                  Respect for self, others and for property
                  Caring
                  Resourcefulness and innovation
                  Commitment to profitability
                  Enthusiasm and camaraderie
                                                               36
Summary Values, Vision, Mission
• The reason for preparing Values, Vision and
  Mission statements is to provide a sense of
  purpose and direction for the organization
  which is much greater than simply making a
  profit.
• Once completed, these statements should
  be shared with the company’s management,
  employees and primary customers.
• These statements should also serve to both
  motivate and guide the actions of the
  company’s managers and employees.


                                 37
IV-Goals and Objectives
 • Goals and objectives are statements
   focusing on “what” the company or
   organization wants to do, accomplish or
   achieve.

  • Strategies are the methods or actions
    necessary to achieve or accomplish goals
    and objectives.
 • Goals and objectives can have:
    Short-term range (1 year or less);
    Intermediate term range (1 to 2 years);
    Long-term range (2 to 5 years or more);

 • Strategic goals/objectives have a long term
   range.
                                               38
Goals & Objectives
 • It is important to note that for some people,
   goals and objectives are slightly different.
    – Some people define “goals” as being
      general statements (usually long-term) of
      what a company wants to do or accomplish,
      while defining “objectives” as specific
      statements (usually short-term).

 • We can therefore use the terms strategic goals
   or strategic objectives in an equivalent or
   interchangeable manner.


                                       39
Goals/Objectives should be SMART

       •   Specific
       •   Measurable
       •   Attainable
       •   Results-Oriented
       •   Time-Limited



                              40
Areas for Strategic Goals
1.19 Areas for Objectives

                       Areas in Which to
                        Set Objectives
        •     Prof it abilit y
        •     Ef f iciency
        •     Grow t h
        •     Shareholder w ealt h
        •     Ut ilizat ion of resources
        •     Reput at ion
        •     Cont ribut ions t o em ployees
        •     Cont ribut ions t o societ y
        •     Market leadership
        •     Technological leadership
        •     Survival
        •     Personal needs of m anagem ent
 Prentice Hall, 2000          Chapter 1             19


                                               41
Benchmarking
 • The benchmarking process can help to
   facilitate the formulation of strategic
   goals /objectives.
 • Benchmarking is a process of identifying
   best practices in specific areas in
   organizations both within and outside of an
   industry for the purpose of matching or
   exceeding them.
 • After monitoring the performance of industry
   competitors and outsiders, challenging
   strategic goals/objectives can be set which
   seek to rival or surpass main competitors in
   regards to key strategic areas.
                                    42
Conclusion
• Strategic goals/objectives are not formulated
  in isolation from the general environment.
• The internal and external audits, which are
  the focus of the next lesson, have an impact
  on the quantitative and qualitative aspects of
  long term goals.
• In other words, strategic goals/objectives are
  set and periodically revised in relation to the
  firms existing strengths and weaknesses and
  external opportunities and threats.
• Strategic management is very much a
  dynamic process.

                                     43

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Mba strategic management 2

  • 1. Chapter 2 The Business Vision & Mission Strategic Management: Concepts & Cases 10th Edition Fred David PowerPoint Slides by Va Siheng, MBA. National University of Management 1
  • 2. Chapter Outline • Value • Vision statement • Mission statement • Goal and objective 2
  • 3. “Management’s job is not to see the company as it is….but as it can become.” John W. Teets “Quote” 3
  • 4. I-Corporate Values • Corporate values are the underlying principles which guide and also drive the actions and activities of individual companies. – A set of principles that further clarifying what we stand for. – A compass for individual and collective behavior. – A clarification of what we are prepared to be judged on by audiences. 4
  • 5. I-Corporate Values Each company or organization has their own set of values. • “Heart and Soul” of the organization – Performance – Reputation • Endure throughout the life of the organization. 5
  • 6. Developing a Corporate Values • Question: What values or beliefs do you want to represent your company? • Facilitator selected top managers and key personnel to complete values form. • Brainstorming Exercise • Final agreement by consensus on the best values to represent company. 6
  • 7. VALUES SELECTION FORM Accountability Innovation Social Responsibility Commitment Leadership Speed Creativity Loyalty Teamwork Customer Service Multi-Cultural Technology Dependability Partnership Transparency Equality Privacy Trust Entrepreneurial Progressive Unique Excellence Quality Other Values: Freedom Reliability Honesty Safety Source: William Bean, Strategic Planning That Makes Things Happen, p. 101. 7
  • 8. Important values Customers Management & Employees Living values 8
  • 9. II- Vision statement Agreement on the basic vision for which the firm strives to achieve in the long run is critically important to the firm’s success. “What do we want to become?” 9
  • 10. Vision & Mission Clear Business Vision Comprehensive Mission Statement 10
  • 11. Vision & Mission Many organizations develop both vision & mission statements. Vision statement-- • Should be established first and foremost • Short – preferably one sentence • Broad management involvement 11
  • 12. Vision Statement Examples National Pawnbrokers Association: “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 (npa.ploygon.net) 12
  • 13. Vision Statement Examples The Bellevue Hospital: “Is the LEADER in providing resources necessary to realize the community’s highest level of HEALTH throughout life”. -- U.S POULTRY & EGG Association 13
  • 14. III- Mission statement -- 90% of all companies have used a mission statement in the previous five years. “What is our business?” •Enduring statement of purpose •Distinguishes one firm from another •Declares the firm’s reason for being 14
  • 15. Mission Statements Also referred to as: •Creed statement •Statement of purpose •Statement of philosophy •Statement of business principles 15
  • 16. Mission Statements Reveal what an organization wants to be and whom it wants to serve Essential for effectively establishing objectives and formulating strategies. 16
  • 17. Vision & Mission Many organizations develop both vision & mission statements. It can be argued that profit, not mission or vision. 17
  • 18. Vision & Mission Profit & vision are necessary to effectively motivate a workforce Shared Vision -- – Creates commonality of interests – Reduce daily monotony – Provides opportunity & challenge 18
  • 19. Developing Vision & Mission Clear mission is needed before alternative strategies can be formulated and implemented Participation from diverse managers is important in developing the mission. 19
  • 20. Developing Vision & Mission Approach to developing -- – Select several articles about vision or mission – Read as background information – Ask to prepare a draft statement – A facilitator merge into document – Request for modifications, Additions, and deletions – Revise the document • Reach final agreement by consensus on vision or mission of the company. 20
  • 21. Mission Statement Examples 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 21
  • 22. Mission Statement Examples Microsoft: “Since its inception in 1975, Microsoft’s mission has been to create software for the personal computer that empowers and enriches people in the workplace, at school and at home.” Coca-Cola: “As the world’s largest beverage company, we refresh the world. We do this by developing superior soft drinks, both carbonated and non-carbonated, and profitable non-alcoholic beverage systems that create value for our company, our bottling partners and our customers.” 22
  • 23. Importance of Mission Benefits from a strong mission Unanimity of Purpose Resource Allocation Mission Organizational Climate Focal point for work structure 23
  • 24. Effective Missions Broad in scope Broad in scope Generate strategic Generate strategic alternatives alternatives Not overly specific Not overly specific Reconciles interests among Reconciles interests among diverse stakeholders diverse stakeholders Finely balanced between Finely balanced between specificity & generality specificity & generality 24
  • 25. Effective Missions Arouse positive feelings & Arouse positive feelings & emotions emotions Motivate readers to action Motivate readers to action Generate favorable Generate favorable impression of the firm impression of the firm 25
  • 26. Effective Missions Reflect future growth Reflect future growth Provide criteria for strategy Provide criteria for strategy selection selection Basis for generating & Basis for generating & evaluating strategic options evaluating strategic options Are dynamic in nature Are dynamic in nature 26
  • 27. 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 27
  • 28. Mission & Customer Orientation An Effective Mission Statement -- • Anticipates customer needs • Identifies customer needs • Provides product/service to satisfy needs 28
  • 29. Vision & Mission Research results are mixed, however, firms with formal mission statements -- • 2x average return on shareholder’s equity • Positive relationship to company performance • 30% high return on certain financial measures 29
  • 30. Products Services Markets Customers Technology Mission Employees Elements Survival Growth Profit Public Image Self-Concept Philosophy 30
  • 31. 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. 31
  • 32. 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. 32
  • 33. Mission Statement Evaluation Matrix 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 33
  • 34. Mission Statement Evaluation Matrix COMPONENTS Self- Concern for Concern for Organization Philosophy Concept Public Image Employees PepsiCo Yes No No No Ben & Jerry's No Yes Yes Yes 34
  • 35.                                                                                                                                                                                     THE AEROSPACE CORPORATION  -- VISION -- To be the world's leader in the application of space technology.   -- MISSION -- To apply our technical knowledge and expertise to enable our customers to successfully exploit the full potential of space and space technology. -- VALUES -- Integrity - Technical Excellence - Objectivity Dedication to Mission Success - Commitment to Our People. 35
  • 36. NORTHWEST AIRLINES The VISION of Northwest Airlines : To build together the world's most preferred airline with the best people; each committed to exceeding our customers' expectations every day. Our MISSION: The people of Northwest Airlines will provide reliable, convenient and consistent air transportation that meets or exceeds customer expectations and earns a sustainable profit. Our VALUES: Northwest has eight essential values or standards that Northwest people are expected to uphold. Safety first Honesty and integrity Trustworthiness Respect for self, others and for property Caring Resourcefulness and innovation Commitment to profitability Enthusiasm and camaraderie 36
  • 37. Summary Values, Vision, Mission • The reason for preparing Values, Vision and Mission statements is to provide a sense of purpose and direction for the organization which is much greater than simply making a profit. • Once completed, these statements should be shared with the company’s management, employees and primary customers. • These statements should also serve to both motivate and guide the actions of the company’s managers and employees. 37
  • 38. IV-Goals and Objectives • Goals and objectives are statements focusing on “what” the company or organization wants to do, accomplish or achieve. • Strategies are the methods or actions necessary to achieve or accomplish goals and objectives. • Goals and objectives can have:  Short-term range (1 year or less);  Intermediate term range (1 to 2 years);  Long-term range (2 to 5 years or more); • Strategic goals/objectives have a long term range. 38
  • 39. Goals & Objectives • It is important to note that for some people, goals and objectives are slightly different. – Some people define “goals” as being general statements (usually long-term) of what a company wants to do or accomplish, while defining “objectives” as specific statements (usually short-term). • We can therefore use the terms strategic goals or strategic objectives in an equivalent or interchangeable manner. 39
  • 40. Goals/Objectives should be SMART • Specific • Measurable • Attainable • Results-Oriented • Time-Limited 40
  • 41. Areas for Strategic Goals 1.19 Areas for Objectives Areas in Which to Set Objectives • Prof it abilit y • Ef f iciency • Grow t h • Shareholder w ealt h • Ut ilizat ion of resources • Reput at ion • Cont ribut ions t o em ployees • Cont ribut ions t o societ y • Market leadership • Technological leadership • Survival • Personal needs of m anagem ent Prentice Hall, 2000 Chapter 1 19 41
  • 42. Benchmarking • The benchmarking process can help to facilitate the formulation of strategic goals /objectives. • Benchmarking is a process of identifying best practices in specific areas in organizations both within and outside of an industry for the purpose of matching or exceeding them. • After monitoring the performance of industry competitors and outsiders, challenging strategic goals/objectives can be set which seek to rival or surpass main competitors in regards to key strategic areas. 42
  • 43. Conclusion • Strategic goals/objectives are not formulated in isolation from the general environment. • The internal and external audits, which are the focus of the next lesson, have an impact on the quantitative and qualitative aspects of long term goals. • In other words, strategic goals/objectives are set and periodically revised in relation to the firms existing strengths and weaknesses and external opportunities and threats. • Strategic management is very much a dynamic process. 43