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Ch 2 -1
Chapter 2
The Business Vision & Mission
Strategic Management:Concepts & Cases
11th Edition
Fred David
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Chapter Outline
What do we want to become?
What is our business?
Importance of Vision and Mission Statements
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Chapter Outline (contd)
Characteristics of a mission statement
Components of a mission statement
Writing & evaluating mission statements
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Vision
Agreement on the basic vision for which thefirm strives to achieve in the long run is
critically important to the firms success.
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What do we want to become?
Vision
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Comprehensive
Mission 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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-- 90%of all companies have used amission 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 firms 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
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Vision & Mission
Profit & vision are necessary to effectively
motivate a workforce
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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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It is the California Energy Commissions
mission to assess, advocate, and act throughpublic/private partnerships to improve energysystems that promote a strong economy andhealthy environment.
Mission Statement Examples
-- California Energy Commission
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The Bellevue Hospital, with respect,compassion, integrity, and courage, honors the
individuality and confidentiality of our patients,employees, and community, and is progressivein anticipating and providing future health careservices.
Mission Statement Examples
-- The Bellevue Hospital
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John Deere has grown and prospered througha long-standing partnership with the worldsmost productive farmers. Today, John Deereis a global company with several equipmentoperations and complementary servicebusinesses. These businesses are closelyinterrelated, providing the company withsignificant growth opportunities and other
synergistic benefits.
Mission Statement Examples
-- John Deere, Inc.
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Importance of Mission
Mission
ResourceAllocation
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 betweenspecificity & generality
Effective Missions
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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 strategyselection
Basis for generating &
evaluating strategic options
Are dynamic in nature
Effective Missions
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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. Fannie Mae
2. Proctor & Gamble
3. Intel Corporation
4. St. Paul Companies
5. Green Mtn. Coffee
6. Deer & Company
2005 Rated Best in Social Responsibility
7. Avon Products, Inc.
8. Hewlett-Packard Co.
9. Agilent Technologies
10.Ecolab, Inc.
11.Imation Corp
12.IBM
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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:
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MissionElements
CustomersMarkets
Employees
PublicImage
Self-Concept Philosophy
Survival
Growth
Profit
Products
Services
Technology
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PepsiCo Mission
PepsiCos mission is to increase the value of our
shareholders investment. We do this through sales
growth, cost controls, and wise investment
resources. We believe our commercial success
depends upon offering quality and value to ourconsumers and customers; providing products that
are safe, wholesome, economically efficient and
environmentally sound; and providing a fair return to
our investors while adhering to the higheststandards of integrity.
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Ben & Jerrys Mission
Ben & Jerrys mission is to make, distribute and sellthe finest quality all-natural ice cream and relatedproducts in a wide variety of innovative flavors madefrom Vermont dairy products. To operate theCompany on a sound financial basis of profitable
growth, increasing value for our shareholders, andcreating career opportunities and financial rewardsfor our employees. To operate the Company in away that actively recognizes the central role thatbusiness plays in the structure of society by initiatinginnovative ways to improve the quality of life of abroad communitylocal, national and international.
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Mission Statement Evaluation Matrix
COMPONENTS
Organization Customers
Products
Services Markets
Concern for
Survival,
Growth,Profitability Technology
PepsiCo Yes No No Yes No
Ben & Jerry's No Yes Yes Yes No
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Mission Statement Evaluation Matrix
COMPONENTS
Organization Philosophy Self-
ConceptConcern forPublic Image
Concern forEmployees
PepsiCo Yes No No No
Ben & Jerry's No Yes Yes Yes
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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