Ch 2 -1Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 2The Business Vision & Mission

Strategic Management: Concepts & Cases

12th Edition

Fred David

Ch 2 -2Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Chapter Outline

What Do We Want to Become?

What Is Our Business?

Importance of Vision and Mission Statements

Ch 2 -3Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Chapter Outline (cont’d)

Characteristics of a Mission Statement

Components of a Mission Statement

Writing & Evaluating Mission Statements

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“The last thing IBM needs right now is a vision.” (July 1993)

Vision

“What IBM needs most right now is a vision.” (March 1996)

– Louis V. Gerstner, Jr., CEO, IBM Corporation

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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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“What do we want to become?”

Vision

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ComprehensiveMission Statement

Vision

Clear Business Vision

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Shared Vision – Creates commonality of interests Reduce daily monotony Provides opportunity & challenge

Vision & Mission

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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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General Motors’ vision is to be the world leader in transportation products and related services.

Vision Statement Examples

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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.

Vision Statement Examples

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Dell’s vision is to create a company culture where environmental excellence is second nature.

Vision Statement Examples

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

Mission Statements

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“What is our business?”

Mission Statements

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Mission Statements

•Enduring statement of purpose

•Distinguishes one firm from another

•Declares the firm’s reason for being

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Mission Statements

•Creed statement

•Statement of purpose

•Statement of philosophy

•Statement of business principles

Also referred to as:

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

Mission Statements

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Essential for effectively establishing objectives and formulating strategies

Mission Statements

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Vision & Mission

Many organizations develop both vision & mission statements

Ch 2 -21Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Vision & Mission

Profit & vision are necessary to effectively motivate a workforce

Ch 2 -22Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Vision & Mission

Shared vision creates a community of interests

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Developing Vision & Mission

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

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Developing Vision & Mission

Participation from diverse managers is important in developing the mission

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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.

Mission Statement Examples

Ch 2 -26Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

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.

Mission Statement Examples

Ch 2 -27Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

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.

Mission Statement Examples

Ch 2 -28Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

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.

Mission Statement Examples

Ch 2 -29Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

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.

Mission Statement Examples

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Importance of Mission

MissionResource Allocation

Unanimity of Purpose

Organizational Climate

Focal Point for Work Structure

Benefits from a strong mission

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Broad in scope

Generate strategic alternatives

Not overly specific

Reconciles interests among diverse stakeholders

Finely balanced between specificity & generality

Broad in scope

Generate strategic alternatives

Not overly specific

Reconciles interests among diverse stakeholders

Finely balanced between specificity & generality

Effective Missions

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Arouse positive feelings & emotions

Motivate readers to action

Generate favorable impression of the firm

Arouse positive feelings & emotions

Motivate readers to action

Generate favorable impression of the firm

Effective Missions

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Reflect future growth

Provide criteria for strategy selection

Basis for generating & evaluating strategic options

Are dynamic in nature

Reflect future growth

Provide criteria for strategy selection

Basis for generating & evaluating strategic options

Are dynamic in nature

Effective Missions

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Natural Environmental PerspectiveIs 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

Ch 2 -35Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Define what the organization is Define what it aspires to be Limited to exclude some ventures

Mission & Customer Orientation – Vern McGinnis

Broad enough to allow for growth Distinguishes firm from all others Stated clearly – understood by all

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

Mission & Customer Orientation

An Effective Mission Statement –

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Affects development of vision & mission

Responsibilities to – Consumers Environmentalists Minorities Communities

Social Policy & Mission

Managerial philosophy shapes social policy –

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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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Mission Statements

1. CHS

2. United Parcel Service

3. Whole Foods Market

4. McDonald’s

5. Alcan

2007 Most Admired in Social Responsibility

6. YRC Worldwide

7. Starbucks

8. International Paper

9. Vulcan Materials

10.Walt Disney

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Mission Statements

1. Visteon

2. Dana

3. CA

4. Delphi

5. Federal-Mogul

2007 Least Admired in Social Responsibility

6. Arvin Meritor

7. Huntsman

8. Navistar International

9. Lyondell Chemical

10.Toys “R” Us

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2x average return on shareholders’ equity Positive relationship to company performance 30% higher return on certain financial measures

Vision & Mission

Research results are mixed, however, firms with formal mission statements generally see a:

Ch 2 -42Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Global PerspectiveSocial 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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Mission Components

CustomersMarkets

Employees

PublicImage

Self-Concept Philosophy

Survival,Growth,Profits

Products orServices

Technology

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Ch 2 -45Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Mission Statement Evaluation Matrix

COMPONENT COMPONENT COMPONENT   COMPONENT   COMPONENT

Organization CustomersProducts

or Services Markets

Concern for Survival, Growth,

Profitability Technology

           

Fleetwood Ent. Yes Yes No Yes Yes

Ben & Jerry's No Yes Yes No Yes

Royal Caribbean Yes  No No No No

Dell Yes Yes Yes Yes Yes

Proctor & Gamble Yes No Yes No Yes

L’Oreal No No No No No

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Mission Statement Evaluation Matrix

  COMPONENT COMPONENT COMPONENT COMPONENT   

Organization PhilosophySelf-

ConceptConcern for Public Image

Concern for Employees

         

Fleetwood Ent. Yes Yes No Yes

PepsiCo Yes No Yes Yes

Royal Caribbean   Yes Yes No Yes

Dell Yes Yes Yes No

Proctor & Gamble No Yes Yes Yes

L’Oreal No Yes Yes Yes

Ch 2 -47Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Key Terms & Concepts

For Review (Chapter 2)

Concern for Employees Customers

Concern for Public Image Markets

Survival, Growth, & Profitability

Mission Statement Components

Creed Statement Managerial Philosophy

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Key Terms & Concepts

For Review (Chapter 2)

Self-Concept Stakeholders

Social Policy Vision Statement

Ch 2 -49Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

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