2. Vision & Mission

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The Business The Business VisionVision

and Missionand Mission

Chapter Two


Chapter Objectives

1. Describe the nature and role of vision and mission statements in strategic management.

2. Discuss why the process of developing a mission statement is as important as the resulting document.

3. Identify the components of mission statements.

4. Discuss how clear vision and mission statements can benefit other strategic-management activities.

5. Evaluate mission statements of different organizations.

6. How the core values are defined in accordance with companies vision and mission.

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A Comprehensive Strategic-Management Model

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Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall4

Vision

• “We choose to go to the moon.”(John F Kennedy 1962)

• “I have a dream.”Dr. Martin Luther King, Jr.August 28, 1963• “It is my unique responsibility as the leader to

shine a spotlight on the future….”(Margaret Thatcher,)Former Prime Minister of England


What Do We Want to Become?

A vision statement should answer the basic question, “What do we want to become?”

“A short, inspiring statement of where you’d like to get to. It provides a unified direction for everyone in an organization and is a continual source of inspiration which cannot be ‘achieved”

“A strong aspiration; Desired future state »

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Vision

Criteria for a Meaningful Vision

A vision engages the heart and the spirit. ... leads toward a worthwhile goal. ... gives meaning to an effort. ... is simple. ... is attainable. ... can change over time.


Some examples

Walt Disney: To make people happyNike: To experience the emotion of

competition, winning and crushing competitors

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Vision Statement Examples

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ComprehensiveMission Statement

Vision

Clear Business Vision


Answers the question: “What is our business?”

Reveals: what the organization wants to be whom we want to serve

Mission Statement


“The fundamental purpose that sets a firm apart from other firms of its type and identifies the scope of its operations in product and market terms”(pearce)

« An overriding purpose in line with the values and expectations of stakeholders ».

Johnson & Scholes

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Mission

“A mission is a brief statement that reflects the core values of an organization.”

“A mission communicates an organization’s long-term objectives”


Questions Addressed By a MissionStatement(pearce)

Why is this firm in business? What are our economic goals? What is our operating philosophy in terms

of quality, company image, and self-concept?

What are our core competencies and competitive advantages?

What customers do and can we serve? How do we view our responsibilities to

stockholders, employees, communities, environment, social issues, and competitors?


Objectives of developing mission

statementA Mission Statement … Serves as a communication tool for an organization Aligns people with a purpose; it fosters commitment and unity Defines directions for change and growth Acts as an evaluation tool to help measure activities and programs reveals what an organization wants to be and whom it wants to serve


Mission Statements are also called

Creed statementStatement of purposeStatement of philosophyStatement of beliefsStatement of business principlesA statement “defining our business”


Characteristics of a Mission Statement

First, a good mission statement allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity.

Second, a mission statement needs to be broad to reconcile differences effectively among, and appeal to, an organization’s diverse stakeholders

Third, include employees, managers, stockholders, boards of directors, customers, suppliers, distributors, creditors, governments (local, state, federal, and foreign), unions, competitors, environmental groups, and the general public.

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Interest Groups

Customers /Competitors

Technostructure/ Support staff

M iddle M anagers/ Operating Core

Suppliers

Shareholders /Board

Government /Professionalassociations

SeniorM anagement

Contract Staff /Special Interest

Groups

Interest Groups


Mission Components

CustomersMarkets

Employees

PublicImage

Self-Concept Philosophy

Survival,Growth,Profits

Products orServices

Technology


Mission Statement Components

1. Customers—Who are the firm’s customers?

2. Products or services—What are the firm’s major products or services?

3. Markets—Geographically, where does the firm compete?

4. Technology—Is the firm technologically current?

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5. Concern for survival, growth, and profitability—Is the firm committed to growth and financial soundness?

6. Philosophy—What are the basic beliefs, values, aspirations, and ethical priorities of the firm?

7. Self-concept—What is the firm’s distinctive competence or major competitive advantage?

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8. Concern for public image—Is the firm responsive to social, community, and environmental concerns?

9. Concern for employees—Are employees a valuable asset of the firm?

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Characteristics of a Mission Statement

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Example Mission Statements

Fleetwood Enterprises will lead the recreational vehicle and manufactured housing industries (2, 7) in providing quality products, with a passion for customer-driven innovation (1). We will emphasize training, embrace diversity and provide growth opportunities for our associates and our dealers (9). We will lead our industries in the application of appropriate technologies (4). We will operate at the highest levels of ethics and compliance with a focus on exemplary corporate governance (6). We will deliver value to our shareholders, positive operating results and industry-leading earnings (5).

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We aspire to make PepsiCo the world’s (3) premier consumer products company, focused on convenient foods and beverages (2). We seek to produce healthy financial rewards for investors (5) as we provide opportunities for growth and enrichment to our employees (9), our business partners and the communities (8) in which we operate. And in everything we do, we strive to act with honesty, openness, fairness and integrity (6).

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Dell’s mission is to be the most successful computer company (2) in the world (3) at delivering the best customer experience in markets we serve (1). In doing so, Dell will meet customer expectations of highest quality; leading technology (4); competitive pricing; individual and company accountability (6); best-in-class service and support (7); flexible customization capability (7); superior corporate citizenship (8); financial stability (5).

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Procter & Gamble will provide branded products and services of superior quality and value (7) that improve the lives of the world’s (3) consumers. As a result, consumers (1) will reward us with industry leadership in sales, profit (5), and value creation, allowing our people (9), our shareholders, and the communities (8) in which we live and work to prosper.

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At L’Oreal, we believe that lasting business success is built upon ethical (6) standards which guide growth and on a genuine sense of responsibility to our employees (9), our consumers, our environment and to the communities in which we operate (8).

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Process of developing strategic directions

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Vision Life-changing fitness experiences every time, everywhere

MissionTo be number one in Group Fitness experiences in all its markets and to

be a top 100 global brand

Values Brave, Change the world, One tribe

Goal(s)

15,000 clubs, a four-program average per club and 10 million

people per week working out in LES MILLS™ classes by 2010


The Process of Developing Vision and Mission Statements

Select several articles about these statements and ask all managers to read these as background information.

Ask managers themselves to prepare a vision and mission statement for the organization.

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The Process of Developing Vision and Mission Statements

Merge these statements into a single document and distribute the draft statements to all managers

Process should create an “emotional bond” and “sense of mission” between the organization and its employees

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Importance of Vision and Mission Statements

To ensure unanimity of purpose within the organization To provide a basis, or standard, for allocating organizational resources To establish a general tone or organizational climate To serve as a focal point for individuals to identify with the organization’s purpose and direction To facilitate the translation of objectives into a work structure To specify organizational purposes To serve as a focal point for individuals to identify with the organization’s purpose and direction To facilitate the translation of objectives into a work structure To specify organizational purposes Arouse positive feelings & emotions Motivate readers to action Generate favorable impression of the firm Generate strategic alternatives Not overly specific Reconciles interests among diverse stakeholders

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Benefits of Having a Clear Mission and Vision

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Newest Trends in MissionComponents

Sensitivity to customer wants• “The customer is our top priority!”• Emphasis on extensive product safety programs

Concern for quality• “Quality is job one!”• Emphasis on quality in manufacturing• New philosophy – quality is the norm

Statements of company vision• Developed to express the aspirations of the executive

leadership• Presents the firm’s strategic intent• “A computer on every desk, and in every home, running on

Microsoft software”


Values

“Guiding principles which affect how will behave every day on the way to fulfilling your mission”

“Values are core beliefs or desires that guide or motivate our attitudes and actions”

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Origins of Values

Principles or standards Personal Qualities Character Traits Codes of Ethics Goals

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Examples

Walt Disney

• No cynicism

• Nurturing of ‘wholesome American values’

• Creativity, dreams and imagination

• Fanatical attention to consistency and detail

• Preservation and control of the Disney Magic Merck

• Corporate social responsibility

• Unequivocal excellence in all aspects of the company

• Science based innovation

• Honesty and integrity

• Profit from work that benefits humanity

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Goals

“Key benchmarks for achieving your mission” (must include quantifiable targets)

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Organisational Objectives [2]

Generally ‘SMART’: Specific Measurable Achievable Realistic Timely

Consistent with the Mission and Aim. One direction, avoid dissonance!!!


Objectives - Examples A larger market share Quicker design-to-market times than rivals Higher product quality than rivals Lower costs relative to key competitors Broader / more attractive product line than rivals A stronger reputation with customers than rivals Superior customer service Recognition as a leader in technology and/or

product innovation Wider geographic coverage than rivals


Concluding Remarks(Some expert views)

To be an effective change leader, you must have strong vision.(HBR) Vision& mission statements should be professionally developed and communicated through

broader stakeholders participation (HBR) Statements are Difficult to develop particularly in turbulently changing time(HBR) These Should reflect followers aspirations(James) Leaders should be able to articulate vision overtime(James) Statements should be straightforward and clear(Baldoni) Create organizational and personal expectations(Baldoni) Directs organizations and individuals(Baldoni) Vision directs and inspire people in the right direction(Cohen) Core values and core purpose remains same while strategies and practices have to be

changed(Collins) Success depends upon successful balancing of continuity and change.(Collins) Effective vision essentially give general direction, motivates people to take actions and

coordinate actions of different people.(Kotter) Strong and influential vision is starting point of change Vision should be constantly and effectively communicated to get people’s support(Kotter)

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Documents

2. Vision & Mission