Ch 2 -1 Copyright © 2011 Pearson Education

Strategic Management: Concepts and Cases Arab World Edition Fred R. David Abbas J. Ali Abdulrahman Y. Al-Aali Chapter 2: The Business Vision and Mission Ch 2 -2 Copyright © 2011 Pearson Education

Chapter Outline Importance of Vision and Mission Statements What Do We Want to Become? What Is Our Business? Characteristics of a Mission Statement Components of a Mission Statement Writing & Evaluating Mission Statements Copyright © 2011 Pearson Education

Copyright © 2011 Pearson Education

What is the definition of vision ? Vision Statement What is the definition of vision ? Where can you find the vision statement of any organization? Examples of vision statements . Why the vision is important? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

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 However , most of the Arab companies stated visions statement , most of them are not well articulated (results of researches ) Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Where can you find the vision statement of any organization ? Since the vision of any organization must be explicit ,it is easy to find it on the website of the organization in section called (about us – our profile ) Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Vision Statements examples “our vision is to be the preferred world leader in chemicals .” (SABIC) “ 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

Vision Statements examples “ our vision is to be the leading provider of innovative financial services in accordance with the legislation of Allah” Dubai Islamic Bank “ our vision is to be a highly innovative telecommunication company ” Oman Telecommunications Company Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Vision Statements benefit Agreement on the basic vision is critically important to the firm’s success. Because the shared established of vision :- Creates commonality of interests Reduces daily Routine Provides opportunity & challenge Copyright © 2011 Pearson Education

Comprehensive Mission Statement Vision Statements Clear Business Vision Comprehensive Mission Statement Copyright © 2011 Pearson Education

Mission Statements What is the definition of mission ? Where can you find the mission of any organization? Missions examples. Why mission is important? Copyright © 2011 Pearson Education

Mission statement characteristics : 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

Statement of philosophy Statement of business principles Mission Statements Mission statements can also be referred to as: Creed statement Statement of purpose Statement of philosophy Statement of business principles It could be founded on the website of the organization in section called (about us/ our profile ) Copyright © 2011 Pearson Education

Mission Statement Examples Isam K. Kabbani (IKK) Group To provide our part of the Arab world with local and reliable services in a variety of sectors and products. To create employment to thousand of personnel and in-house training for hundreds of young Arab graduates in crucial sectors to the benefit of the IKK Group,. To set a good example of our basic business philosophy: “Hire well, train well, pay well and treat well.” Copyright © 2011 Pearson Education

Mission Statement Examples Saudi Research and Marketing Group To provide high content media services and products that are high quality and reliable. To build numerous media platforms. To continually invent new products to meet the needs of various social categories in various regions. To service readers, audience and advertisers. Copyright © 2011 Pearson Education

Mission Statement Examples Etisalat (STC) To extend people’s reach. At Etisalat, we are actively developing advanced networks that will enable people to develop, to learn and grow. Sharjah Islamic Bank Sharjah Islamic Bank aims to provide the best services by commitment to serve people and the society in order to contribute towards its growth. Our mission has multiple dimensions aimed at communicating with all of our different audiences. Copyright © 2011 Pearson Education

Mission Statement Examples Gulf Glass Manufacturing Our Mission is to be the World’s best supplier among the glass (industries) and to achieve leadership position in Gulf Market(s) by serving the needs of our customers in innovative ways. By saying World’s Best we mean a consistently growing company that supplies quality glass products and superior service. Being a successful company, we can facilitate continuous improvement of products and continue to serve those to whom we are responsible: our customers and our employees. we will achieve our mission by maintaining a spirit of excellence in everything we do. Copyright © 2011 Pearson Education

Focal Point for Work Structure Importance of Mission Benefits from a strong mission Unanimity of Purpose Mission Resource Allocation Organizational Climate Focal Point for Work Structure Copyright © 2011 Pearson Education

Mission & vision differences Focus What is our business ? what do we want to become? ? the main Q Less broader More broader Scope More longer Must be short (one sentence if possible ) Long The foundation of objectives , plans , strategy ,and policies. It is the foundation of the mission Role Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Mission development as a process For mission to be developed a wide approach must be undertaken :- Reading articles (as background)by managers preparation of mission statements A facilitator should integrate these statements into a single documents Distributing the draft mission to all managers Modifications , additions, changes are requested (evaluation) Note Organizations can manage this process internally (by discussion group) , or externally by consultant or external facilitator Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

The Effective Missions requirements Broad in scope Generate strategic alternatives Reconciles interests among diverse stakeholders Reflects a balance between specifications &generalizations Arouse positive feelings and emotions Motivate employees to action Generate favourable impression of the firm Reflect future growth Provide criteria for strategy selection Dynamic in nature Copyright © 2011 Pearson Education

Importance (Benefits) of Vision &Mission statements According the research results, many benefits can be achieved through the formalized mission:- 2x average return on shareholders’ equity Positive relationship to company performance 30% higher return on certain financial measures Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Why organizations must carefully develop a written mission statement? To keep the following benefits:- To ensure unanimity of purpose within the organization To provide a basis or standard for maximizing the resources allocation To establish a general tone or organizational climate To facilitate putting the objectives and polices into actions To maximizing the efficiency of resource allocation process Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Characteristics of a Mission First :A declaration of attitude Second :A customer orientation Third: A declaration of social Policy Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

A mission statement is a declaration of attitude It must be broad in scope not only a statement of specific details It should not be too lengthy, recommended length is less than 250 words It must arouse positive feelings and emotion It must generate a good impression that the firm is successful, has direction, and is worthy of time It must imply the growth directions in the future It must serve as a framework for evaluating both current and prospective activities. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

A mission must be a customer orientation through what Vern McGinnis mentioned Define what the organization is. Define what it aspires to be. Broad enough to allow for growth Distinguishes firm from all others Stated clearly – understood by all Copyright © 2011 Pearson Education

To be effective customer orientation mission : Anticipates customer needs Identifies the utility of a firm’s products or service to the customer (not the clothes- but the attractive look) (not shoes – but the comfort) (not the book –but knowledge ) (not the milk -----but health care ----etc) Provides product/service to satisfy needs Copyright © 2011 Pearson Education

Social Policy & Mission Mission is a declarative of social policy The term Social policy embraces managerial philosophy and thinking at the highest levels of an organization Social policy affects the development of a business mission statement Mission statement conveys the social responsibility of the firm to consumers ,environmentalists ,minorities ,communities…..etc In 2007 Arabian Business magazine rated Saudi German Hospital (SGH) as a highly socially responsible corporation Note In the Arab world , rating corporations in terms of social responsibility is a new trend and it will take a time to become a common tradition Copyright © 2011 Pearson Education

Social responsibility examples Alfa , a Lebanon – based company developed a program called 4life , intended to support the children in communication need; so they can enjoy life in a dignified and self reliant and participate in their community. Dallah group contributes to education and health activities in communities where it operates ------it provides training to sharpen young peoples 'skills and improve their chance of finding suitable position which bring a reasonable income . Etsalat offers the freedom package , which serves people with a special need, it was lunched and designed specially to be used to enhance their communication options, additionally it support them by many activities in different areas Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Mission Statement Components Mission statement can and do vary in length ,content , format,….but it includes the most essential components from the following Customer , who are the firms customer? Products & service, what are the firms main products? Markets ,where does the firm compete? Technology, I s the firm technological current? Concern for survival ,growth, profitability I s the firm committed to growth and financial, soundness? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

7-Self- concept, what is the firm major competitive advantages? 6-Philosophy , what are the basic believes , values, and ethical prosperities of the firm? 7-Self- concept, what is the firm major competitive advantages? 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? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Mission Components Products or Services Markets Customers Technology Employees Survival, Growth, Profits Public Image Philosophy Self- Concept Copyright © 2011 Pearson Education

Writing & Evaluating Mission Statement There is no one best mission statement for a particular organization Good judgment is required in evaluating mission statement Not all companies covers all the nine components in their mission statement. The nine basic components serve as a practical framework for evaluating and writing mission statement The more components are present in mission statement, the more strong statement it could be Evaluation of a mission statement according to the presence of the nine components is just the beginning of the process to assess a statement’s overall Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Mission Statement Evaluation Matrix Component 1 Component 2 Component 3 Component 4 Component 5 Component 6 Component 7 Component 8 Component 9 Customer Products or Services Markets Technology Concern for Survival, Growth, Profitability Philosophy Self-Concept Concern for Public Image Concern for Employees Total out of 9 Organizations   Ch 2 -35 Copyright © 2011 Pearson Education

Mission Statement Evaluation Matrix Component 1 Component 2 Component 3 Component 4 Component 5 Component 6 Component 7 Component 8 Component 9 Customers Products or Services Markets Technology Concern for Survival, Growth, Profitability philosophy Self-Concept Concern for Public Image Concern for Employees Total out of 9  Organization   Isam K. Kabbani Group No Yes 6 Saudi Research and Marketing Group 4 Etisalat  1 Sharjah Islamic Bank 2 Gulf Glass Manufacturing 5 SABIC Mission Statement Evaluation Matrix Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

According to the MSEM we can Rank these companies as follow First ISAM K.Kabbani Group ---- (includes 6 components out of 9) Second Gulf Glass Manufacturing (includes 5 components out of 9 ). Third Saudi Research and Marketing Group (includes 4 components out of 9 ). Fourth Sharjah Islamic Bank & SABIC (include 2 components out of 9 ). Fifth Etisalat  (includes 1 components out of 9 ). Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2011 Pearson Education

Assignment (2) Individual task Try to apply the Mission Statement Evaluation Matrix (MSEM) on the identified companies. 3 Companies per student Deadline for delivery one week later Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall