Fred R. David

Prentice Hall

Ch. 2-1

Chapter 2

The Business Mission

Strategic Management:

Concepts and Cases. 9th edition

Fred R. David

Fred R. David

Prentice Hall

Ch. 2-2

Chapter Outline

What Do We Want to Become?

What Is Our Business?

Importance of Vision and Mission Statements

Fred R. David

Prentice Hall

Ch. 2-3

Chapter Outline

Characteristics of a Mission Statement

Components of a Mission Statement

Writing and Evaluating Mission Statements

Fred R. David

Prentice Hall

Ch. 2-4

Vision

Management and executive agreement on

the basic vision for which the firm strives

to achieve in the long run is critically

important.

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Prentice Hall

Ch. 2-5

Vision statement answers the question:

What do we want to become?

Vision

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Prentice Hall

Ch. 2-6

Clear vision

Provides foundation for comprehensive mission statement

Vision

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Prentice Hall

Ch. 2-7

Vision & Mission

Vision statement developed first

Short preferably one sentence

Broad management involvement

Fred R. David

Prentice Hall

Ch. 2-8

Mission Statements

Recent Data indicate that:

90% of all companies have used a mission statement sometime in the previous five

years.

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Prentice Hall

Ch. 2-9

Mission Statements

Mission statement answers the question:

What is our business?

Fred R. David

Prentice Hall

Ch. 2-10

Mission Statements

Mission Statement:

Enduring statement of purpose

Distinguishes one organization from another in similar enterprises

Declaration of an organizations reason for being

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Prentice Hall

Ch. 2-11

Mission Statements

Mission Statements also referred to as:

Creed statement

Statement of purpose

Statement of philosophy

Statement of business principles

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Prentice Hall

Ch. 2-12

Mission Statements

Mission Statements

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

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Prentice Hall

Ch. 2-13

Mission Statements

Mission Statements

Essential for effectively establishing objectives and formulating strategies

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Prentice Hall

Ch. 2-14

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

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Prentice Hall

Ch. 2-15

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

Fred R. David

Prentice Hall

Ch. 2-16

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

Fred R. David

Prentice Hall

Ch. 2-17

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

Fred R. David

Prentice Hall

Ch. 2-18

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

Mission Characteristics

Fred R. David

Prentice Hall

Ch. 2-19

Effective mission statements:

Reflect judgments re: future growth

Provide criteria for selecting strategies

Basis for generating & screening strategic options

Are dynamic in orientation

Mission Characteristics

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Prentice Hall

Ch. 2-20

Customer Orientation

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

Fred R. David

Prentice Hall

Ch. 2-21

A good mission statement reflects the

anticipations of customers.

Identify customer needs

Provide product/service to satisfy needs

Customer Orientation

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Prentice Hall

Ch. 2-22

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

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Prentice Hall

Ch. 2-23

Social policy should be integrated in all strategic-management activities.

Mission statement is an effective instrument for conveying the social

responsibility of the firm.

Social Policy & Mission

Fred R. David

Prentice Hall

Ch. 2-24

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.

Fred R. David

Prentice Hall

Ch. 2-25

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

Mission Components

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Prentice Hall

Ch. 2-26

Components of Mission

Components of mission and corresponding questions to be answered:

Customers: Who are the firms customers?

Products or services: What are the firm's major products or

services?

Fred R. David

Prentice Hall

Ch. 2-27

Components of Mission

Markets:

Geographically, where does the firm compete?

Technology:

Is the firm technologically current?

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Prentice Hall

Ch. 2-28

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?

Fred R. David

Prentice Hall

Ch. 2-29

Components of Mission

Self-concept:

What is the firms 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?

Fred R. David

Prentice Hall

Ch. 2-30

PepsiCo Mission Statement

PepsiCos 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.

Fred R. David

Prentice Hall

Ch. 2-31

Ben & Jerrys Mission Statement

Ben & Jerrys 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 communitylocal, national and international.

Fred R. David

Prentice Hall

Ch. 2-32

COMPONENTS

Organization Customers

Products

Services Markets

Concern for

Survival,

Growth,

Profitability Technology

PepsiCo Yes No No Yes No

Ben & Jerry's No Yes Yes Yes No

Evaluation Matrix of Mission Statements

Fred R. David

Prentice Hall

Ch. 2-33

Evaluation Matrix of Mission Statements

COMPONENTS

Organization Philosophy

Self-

Concept

Concern for

Public Image

Concern for

Employees

PepsiCo Yes No No No

Ben & Jerry's No Yes Yes Yes