Chapter 2: THE BUSINESS MISSION

What is a Mission Statement?

• A mission statement is a short summary of an organization’s core
purpose, focus, and aims.
• This usually is comprised of a brief description of what the
organization does and its key objectives.
• It often takes shape as a declaration of what an organization does
every day, defining the day-to-day activities of work, and each
person who works for the organization contributes to that overall
mission.
• The mission statement drives the company.
• It outlines both what you do and what comprises the core of the
business, and from this, objectives are made clear, followed finally
by what it takes to reach those objectives. A strong mission
statement is one that motivates a team to consistently advance
toward a common goal.
… continued
 Questions that guide mission statements include:

• What do we do?
• Whom do we serve?
• How do we serve them?

 Mission statements establish a framework for the behaviour of

those working in the company, often starting with declarations
such as, “We provide…”, “We offer…”, or “We are a…”.
 Because of its reference to the everyday activities of the
company, missions statements can often be used as a basis for
performance standards, and can guide employees at various
levels of the company in their decision-making.
What is a Vision Statement?
 A vision statement is a short description of an organization’s
aspirations and the wider impact it aims to create.
 It acts as a guiding beacon to those within the organization, as
well as something that sets the ground for internal decision-making
and determines the intended direction of the organization.
 A vision statement is meant to be a clear, definitive statement of
what an organization wants to accomplish, and what the world
will look like once they have accomplished that mission.
 The vision statement gives the company direction.
 Because it describes the future of the business, it emphasizes the
organization’s overall purpose.
 The vision statement is about what you want to become – it is
meant to be aspirational.
 … continued
 Questions that guide vision statements include:

A. What are our hopes and dreams for the company?

B. What problem are we solving for the greater good?
C. Who and what are we inspiring to change?

 A vision statement is future-oriented, providing a sense of what the

company values to both those inside the organization and outside
of it.
 Because vision statements aim to summarize the overall strategic
goals for a company, they tend to remain unchanged often.
 Every smaller organizational step is curated to be contributing to the
effort in achieving the overall vision of the company.
 Because of its transcendent and directive nature, vision statements
are often written in the present tense, but still serve the future of
the organization.
2.1 The importance of a clear mission
 Carefully develop mission statement PROVIDES the
following benefits:

1. To make sure all employees/managers understand the

firm’s purpose or reason for being.
2. To provide a basis for prioritization of key internal and
external factors utilized to formulate feasible strategies.
3. To provide a basis for the allocation of resources.
4. To provide a basis for organizing work, departments,
activities, and segments around a common purpose.
Ten Benefits of Having a Clear Mission and
Vision
1. Achieve clarity of purpose among all managers and employees.
2. Provide a basis for all other strategic planning activities, including
internal and external assessment, establishing objectives, developing
strategies, choosing among alternative strategies, devising policies,
establishing organizational structure, allocating resources, and
evaluating performance.
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve divergent views among managers.
6. Promote a sense of shared expectations among all managers and
employees.
7. Project a sense of worth and intent to all stakeholders.
8. Project an organized, motivated organization worthy of support.
9. Achieve higher organizational performance.
10. Achieve synergy among all managers and employees.
2.2 The nature of business mission

 A mission statement is a declaration of attitude and outlook.

 It usually is broad in scope for at least two major reasons.
 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.
 Excess specificity would limit the potential of creative growth for
the organization.
 However, an overly general statement that does not exclude any
strategy alternatives could be dysfunctional.
 Apple Computer’s mission statement, for example, should not open
the possibility for diversification into pesticides—or Ford Motor
Company’s into food processing.
Characteristics of a Mission Statement
1. Broad in scope: does not include monetary amounts, numbers,
percentages, ratios, or objectives
2. Fewer than 150 words in length
3. Inspiring
4. Identifies the utility of a firm’s products
5. Reveals that the firm is socially responsible
6. Reveals that the firm is environmentally responsible
7. Includes Nine components: customers, products or services,
markets, technology, concern for survival/growth/profits,
philosophy, self-concept, concern for public image, concern for
employees
8. Reconciliatory
9. Enduring
 2.3 Components of a mission statement
 Because a mission statement is often the most visible and public
part of the strategic-management process, it is important that it
includes the following nine 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?
5. 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 (distinctive competence)—What is the firm’s major
competitive advantage?
8. Public image—Is the firm responsive to social, community, and
environmental concerns?
9. Employees—Are employees a valuable asset of the firm?
Evaluating and Writing Mission Statements
The Process of Developing Vision and Mission Statements
 As indicated in the strategic-management model, clear vision and
mission statements are needed before alternative strategies can
be formulated and implemented.
 As many managers as possible should be involved in the process
of developing these statements because, through involvement,
people become committed to an organization.
• There is no one best mission statement for a particular
organization
• So when it comes to evaluating mission statements, good
judgment is required.
• Ideally, the statement will provide more than simple inclusion of a
single word such as products or employees regarding a respective
1. Analysis . Where are we now? What are our internal strengths and weaknesses
and external opportunities and threats?
2. Formulation . What are our mission and vision? What is our sweet spot
(i.e.,where our passion, our abilities, and our purpose or reason for existence
intersect)? What is our strategic intent? What are our strategic goals? What are the
means—our strategies—through which we will realize our intent and accomplish
our goals?
3. Action Planning. How do our strategic goals translate into specific and concrete
tactics? How do our tactics translate into major and minor tasks? What obstacles are
most likely to interfere with our subsequent execution, and how will we recognize
and then resolve such unexpected occurrences?
4. Execution. What steps can we take to ensure subsequent execution throughout
the entire organization? How do we ensure that everyone has the needed levels of
awareness, understanding, buy-in, commitment, and advocacy?
5. Continuous Improvement. What can we do to constantly and continuously
improve our strategic planning process, and thus the quality of our strategic
planning materials and deliverables? What can we do to improve the way we
execute to help ensure increasingly more effective and efficient execution?
 The Concept Objectives and Goals
Goals
A goal is considered to be an open-ended statement of what one
wants to accomplish with no quantification of what is to be achieved
and no time criteria for its completion.
Objectives are the end results of planned activity. They state what is
to be accomplished by when and should be quantified. For example,
“increase profits by 10% over the last year” is an objective.

“Objectives” are the ends that state specifically how the goals shall
be achieved. In this sense, objectives make the goals operational.
Objectives are concrete and specific in contrast to goals which are
generalized. While goals may be qualitative, objectives tend to be
mainly quantitative, measurable and comparable.
 Stated vs. Operational Goals

Operational goals are the real goals of an organization. Stated goals

are the official goals of an organization. Operational goals tell us what
the organization is trying to do, irrespective of what the official goals
say the aims are. Official goals generally reflect the basic philosophy
of the company and are expressed in abstract terminology.
the important operational goals:
1. Environmental Goals
2. Output Goals
3. System Goals
4. Product Goals
5. Derived Goals
Characteristics of Objectives

• Well – stated objectives should be:

Specific
Quantifiable
 Measurable
Clear
Consistent
Reasonable
Challenging
Contain a deadline for achievement
Communicated, throughout the organization
Role of Objectives

• play an important role in strategic management. They are essential

for strategy formulation and implementation because:
They provide legitimacy
They state direction
They aid in evaluation
They create synergy
They reveal priorities
They focus coordination
They provide basis for resource allocation
They act as benchmarks for monitoring progress
They provide motivation