1. Chapter 2 The Business Vision & Mission
Strategic Management: Concepts & Cases
12th Edition
Fred David
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2. Vision is the desired future position of a company ( Raynor, 1998)
Definitions of the strategic management concepts
Values are a set of timeless guiding principles pointing out what is important for an organization ( Collins and Porras, 1996)
Competence is the ability of an organization to sustain coordinated deployments of resources capabilities in ways that help the organization achieve its goals (Sanchez, 2001)
A mission is the organization’s most fundamental reason for existence (Collins and Porras, 1996)
Vision is the desired future position of a company ( Raynor, 1998)
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3. Objectives of the chapter
Describe the nature and role of vision and mission statements in strategic management.
Discuss why the process of developing a mission statement is as important as the resulting document.
Identify the components of mission statements.
Discuss how clear vision and mission statements can benefit other strategic-management activities.
Evaluate mission statement of different organizations.
Write good vision and mission statements.
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4. Chapter Outline What Do We Want to Become? What Is Our Business?
Importance of Vision and Mission Statements
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5. Chapter Outline (cont’d)
Characteristics of a Mission Statement
Components of a Mission Statement
Writing & Evaluating Mission Statements
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6. Vision “The last thing IBM needs right now is a vision.” (July 1993)
“What IBM needs most right now is a vision.” (March 1996)
– Louis V. Gerstner, Jr., CEO, IBM Corporation
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7. Vision
Agreement on the basic vision for which the firm strives to achieve in the long run is critically important to the firm’s success.
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8. Vision “What do we want to become?”
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9. Comprehensive Mission Statement
Vision
Clear Business Vision
Comprehensive Mission Statement
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10. Shared Vision – Vision & Mission Creates commonality of interests
Reduce daily monotony
Provides opportunity & challenge
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11. Vision Statement Examples
Tyson Foods’ vision is to be the world’s first choice for protein solutions while maximizing shareholder value.
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12. Vision Statement
Many organizations have both a vision and a mission statement.
but the vision statement should be established first and foremost.
The vision statement should be short, preferably one sentence,
as many managers as possible should have input into developing the statement.
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13. Vision Statement Examples
General Motors’ vision is to be the world leader in transportation products and related services.
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14. Vision Statement Examples
PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today.
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15. Vision Statement Examples
Dell’s vision is to create a company culture where environmental excellence is second nature.
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16. Mission Statements
– 90% of all companies have used a mission statement in the previous five years
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17. Mission Statements “What is our business?”
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18. Enduring statement of purpose Distinguishes one firm from another
Mission Statements
Enduring statement of purpose
Distinguishes one firm from another
Declares the firm’s reason for being
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19. Creed/faith statement Statement of purpose Statement of philosophy
Mission Statements
Also referred to as:
Creed/faith statement
Statement of purpose
Statement of philosophy
Statement of business principles
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21. Mission Statements
Reveal what an organization wants to be and whom it wants to serve
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22. Mission Statements
Essential for effectively establishing objectives and formulating strategies
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23. Many organizations develop both vision & mission statements
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24. Profit & vision are necessary to effectively motivate a workforce
Vision & Mission
Profit & vision are necessary to effectively motivate a workforce
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25. Shared vision creates a community of interests
Vision & Mission
Shared vision creates a community of interests
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26. Developing Vision & Mission
Clear mission is needed before alternative strategies can be formulated and implemented
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27. Developing Vision & Mission
Participation from diverse managers is important in developing the mission
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28. Developing Vision & Mission
A widely used approach to developing a mission statement is to:
Select several articles about mission statements and ask all managers to read these as background information.
Ask managers to prepare a mission statement for the organization.
A facilitator, or committee of top managers, should then merge these statements into a single document and distribute this draft to all managers.
A request for modifications, additions, and deletions is needed next along with a meeting to revise the document.
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29. Mission Statement Examples
Fleetwood Enterprises will lead the recreational vehicle and manufactured housing industries in providing quality products with a passion for customer-driven innovation. We will emphasize training, embrace diversity and provide growth opportunities for our associates and our dealers. We will lead our industry in the application of appropriate technologies. We will operate at the highest levels of ethics and compliance with a focus on exemplary corporate governance. We will deliver value to our shareholders, positive operating results and industry-leading earnings.
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30. Mission Statement Examples
We aspire to make PepsiCo the world’s premier consumer products company, focused on convenient foods and beverages. We seek to produce healthy financial rewards for investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive to act with honesty, openness, fairness and integrity.
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31. Mission Statement Examples
Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet consumer expectations of highest quality; leading technology; competitive pricing; individual and company accountability; best-in-class service and support; flexible customization capability; superior corporate citizenship; financial stability.
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32. Mission Statement Examples
Proctor & Gamble will provide branded products and services of superior quality and value that improve the lives of the world’s consumers. As a result, consumers will reward us with industry leadership in sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.
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33. Mission Statement Examples
At L’Oreal, we believe that lasting business success is built upon ethical standards which guide growth and on a genuine sense of responsibility to our employees, our consumers, our environment and to the communities in which we operate.
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34. Importance of Mission
Rarick and Vitton found that firms with a formalized mission statement have twice the average return on shareholders’ equity than those firms without a formalized mission statement.
Bart and Baetz found a positive relationship between mission statements and organizational performance.
Business Week reports that firms using mission statement have a 30 percent higher return on financial measures than those without such statements.
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35. Importance of Mission Benefits from a strong mission Mission
Unanimity/unity of Purpose
Mission
Resource Allocation
Organizational Climate
Focal Point for Work Structure
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36. Benefits from a strong mission
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, and to deter those who cannot from participating further in the organization’s activities
To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization
To specify organizational purposes and the translation of these purposes into objectives in such a way that cost, time, and performance parameters can be assessed and controlled
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37. Effective Missions Broad in scope Generate strategic alternatives
Not overly specific
Reconciles interests among diverse stakeholders
Finely balanced between specificity & generality
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38. Effective Missions Arouse positive feelings & emotions
Motivate readers to action
Generate favorable impression of the firm
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39. Effective Missions Reflect future growth
Provide criteria for strategy selection
Basis for generating & evaluating strategic options
Are dynamic in nature
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40. Natural Environmental Perspective Is Your Firm Environmentally Proactive?
Preserving the natural resources is good business!
Reactive environmental policies can be expensive
Proactive policies force companies to innovate and upgrade processes
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41. 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
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42. Mission & Customer Orientation
An Effective Mission Statement –
Anticipates customer needs
Identifies customer needs
Provides product/service to satisfy needs
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43. Social Policy & Mission
Managerial philosophy shapes social policy –
Affects development of vision & mission
Responsibilities to –
Consumers
Environmentalists
Minorities
Communities
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44. Social Policy & Mission
Social policy should be integrated in all strategic-management activities
Mission should convey the social responsibility of the firm
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45. Mission Statements 2007 Most Admired in Social Responsibility CHS
United Parcel Service
Whole Foods Market
McDonald’s
Alcan
YRC Worldwide
Starbucks
International Paper
Vulcan Materials
Walt Disney
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46. Mission Statements 2007 Least Admired in Social Responsibility Visteon
Dana CA
Delphi
Federal-Mogul
Arvin Meritor
Huntsman
Navistar International
Lyondell Chemical
Toys “R” Us
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47. Vision & Mission
Research results are mixed, however, firms with formal mission statements generally see a:
2x average return on shareholders’ equity
Positive relationship to company performance
30% higher return on certain financial measures
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48. Global Perspective Social Policies on Retirement: Japan Versus the World
Labor shortages due to aging population
Shortages can be met by immigration
Historical barriers to immigration in Japan lead to significant economic problems
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49. Mission Components Products or Services Markets Customers Technology
Employees
Survival,
Growth,
Profits
Public
Image
Philosophy
Self-Concept
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50. MISSION STATEMENT COMPONENTS
1. Customers: Who are the firm’s customers?
2. Products or services: What are the firm’s major products?
3. Markets: Geographically, where does the firm compete?
4. Technology: Is the firm technologically current?
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?
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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52. Mission Statement Evaluation Matrix
COMPONENT
  COMPONENT
Organization
Customers
Products or Services
Markets
Concern for Survival, Growth, Profitability
Technology
Fleetwood Ent.
Yes No
Ben & Jerry's
Royal Caribbean
 No
Dell
Proctor & Gamble
L’Oreal
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53. Mission Statement Evaluation Matrix
  COMPONENT
COMPONENT
COMPONENT  
Organization
Philosophy
Self-Concept
Concern for Public Image
Concern for Employees
Fleetwood Ent.
Yes No
PepsiCo
Royal Caribbean 
 Yes
Dell
Proctor & Gamble
L’Oreal
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54. Teamwork
Write a mission statement, either for a business, personal or family.
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55. Review
Compare and contrast vision statements with mission statements in terms of composition and importance.
Many organizations develop both a mission statement and a vision statement. Whereas the mission statement answers the question, “What is our business?” the vision statement answers the question, “What do we want to become?” Both statements are essential for firm success.
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56. Review
Do local petrol stations need to have written vision and mission statements? Why or why not?
Why do you think organizations that have a comprehensive mission statement tend to be high performers? Does having a comprehensive mission cause high performance?
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57. Review
Explain why a mission statement should not include strategies and objectives.
The statement needs to be broad in scope to effectively provide a basis for performing an external and internal audit and for generating and selecting among alternative strategies.
specific strategies and objectives in a mission statement could reduce the level of innovative and creative thinking in an organization.
jeopardizes the potential for the statement to be widely accepted by all managers and employees of the organization.
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58. Review
What is your college or university’s self-concept? How would you state that in a mission statement?
Why is it important for a mission statement to be reconciliatory? (different stakeholders)
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59. Review
In your opinion, what are the three most important components to include in writing a mission statement? Why?
All of the evaluative criteria described in Chapter 2 are important, but three are particularly important: customers, products or services, and markets.
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