Chapter 3 - The Business Mission PDF

Chapter 3 The Business Vision & Mission Ch 3 -1 Asres Abitie (PhD)  Chapter Outline What do we want to become? What is our business? Importance of Vision and Mission Statements...

Chapter 3 The Business Vision & Mission Ch 3 -1 Asres Abitie (PhD)  Chapter Outline What do we want to become? What is our business? Importance of Vision and Mission Statements Ch 3 -2 Asres Abitie (PhD)  Chapter Outline (cont’d) Characteristics of a mission statement Components of a mission statement Writing & evaluating mission statements Ch 3 -3 Asres Abitie (PhD)  Vision An inspiring, long-term “dream” about what the organization will achieve in the future Represents a destination driven by and invoking passion Ch 3 -4 Asres Abitie (PhD)  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. Ch 3 -5 Asres Abitie (PhD)  Vision “What do we want to become?” Ch 3-6 Asres Abitie (PhD)  Vision Clear Business Vision Comprehensive Mission Statement Ch 3 -7 Asres Abitie (PhD)  Vision & Mission Shared Vision -- ◼ Creates commonality of interests ◼ Reduce daily monotony ◼ Provides opportunity & challenge Ch 3 -8 Asres Abitie (PhD)  Vision Statement Examples "To see Ethiopia become a country where democratic rule, good-governance and social justice reigns, upon the involvement and free will of its peoples; and once extricating itself from poverty becomes a middle-income economy." Vision of Ethiopia Ch 3 -9 Asres Abitie (PhD)  Vision Statement Examples “ Making Ethiopia an "African Beacon of Prosperity" by creating the necessary and sufficient conditions." (2021-2030) Vision of Ethiopia Ch 3 -10 Asres Abitie (PhD)  Vision Statement Examples “Addis Ababa University aspires to be a pre-eminent African research university dedicated to excellence in teaching, critical enquiry, creativity and public action in an academic community that cultivates and celebrates diversity.” Vision of AAU - Old Ch 3 -11 Asres Abitie (PhD)  Vision Statement Examples “To become a leading research university in Africa, to advance national needs and be responsive to global development” Vision of AAU - New Ch 3 -12 Asres Abitie (PhD)  Vision Statement Examples "A world-class commercial bank financially driving Ethiopia's future." ◼ Note: World-class in this context presumes efficiency, good corporate governance & culture towards best international banking practices. Vision of CBE Ch 3 -13 Asres Abitie (PhD) Vision Statement Examples Empower people through great software anytime, anyplace, and on any device. Vision of Microsoft Ch 3 -14 Asres Abitie (PhD)  Mission Statements Where are we now? Ch 3 -15 Asres Abitie (PhD)  Mission Statements “What is our business?” Ch 3-16 Asres Abitie (PhD)  Mission Statements Enduring statement of purpose Distinguishes one firm from another Declares the firm’s reason for being Ch 3 -17 Asres Abitie (PhD)  Mission Statements Also referred to as: Creed statement Statement of purpose Statement of philosophy Statement of business principles Ch 3 -18 Asres Abitie (PhD)  Mission Statements Reveal what an organization wants to be and whom it wants to serve Ch 3 -19 Asres Abitie (PhD)  Mission Statements Essential for effectively establishing objectives and formulating strategies Ch 3 -20 Asres Abitie (PhD)  Vision & Mission Many organizations develop both vision & mission statements Ch 3 -21 Asres Abitie (PhD)  Vision vs. Mission ◼ The vision is more broad and future oriented – the goal on the horizon ◼ The mission is more focused – how you will get to the horizon Ch 3 -22 Asres Abitie (PhD)  Vision & Mission Profit & vision are necessary to effectively motivate a workforce Ch 3-23 Asres Abitie (PhD)  Vision & Mission Shared vision creates a community of interests Ch 3 -24 Asres Abitie (PhD)  Developing Vision & Mission Clear mission is needed before alternative strategies can be formulated and implemented. Ch 3 -25 Asres Abitie (PhD)  Developing Vision & Mission Participation from diverse managers is important in developing the mission Ch 3 -26 Asres Abitie (PhD)  Mission Statement Examples Foster a democratic University which gives pride of place to its students in instruction and provision of services, while encouraging the robust exercise of academic freedom through the equal and full participation of its members and a free play of diverse perspectives in both learning and governance. Enhance Ethiopia's capacity in higher education by developing vibrant graduate programs and by nurturing professional competence, a humanistic education, a scientific culture, academic excellence and committed ethical citizenship. AAU Ch 3 -27 Asres Abitie (PhD)  Mission Statement Examples ◼ To create value to our customers & stakeholders by providing safe & reliable passenger & cargo air transport service. ◼ To provide aircraft maintenance, training & other aviation-related services. ◼ To invest in the latest aviation technology & highly trained & motivated human resource. ◼ To play a visible role in the development of trade & tourism. ----EAL Ch 3 -28 Asres Abitie (PhD)  Mission Statement Examples To provide "customers with the solutions they need to capture, store, process, output, and communicate images - anywhere, anytime." -- Kodak. Ch 3 -29 Asres Abitie (PhD) Mission Statement Examples As a company that is "passionately committed to providing personal mobility for people around the world.... We anticipate consumer need and deliver outstanding produces and services that improve people's lives." ---Ford Motor Company Ch 3 -30 Asres Abitie (PhD)  Importance of Mission Benefits from a strong mission Unanimity of Purpose Resource Allocation Mission Organizational Climate Focal point for work structure Ch 3 -31 Asres Abitie (PhD) Effective Missions ✓Broad in scope ✓Generate strategic alternatives ✓Not overly specific ✓Reconciles interests among diverse stakeholders ✓Finely balanced between specificity & generality Ch 3 -32 Asres Abitie (PhD) Effective Missions ✓Arouse positive feelings & emotions ✓Motivate readers to action ✓Generate favorable impression of the firm Ch 3 -33 Asres Abitie (PhD) Effective Missions ✓Reflect future growth ✓Provide criteria for strategy selection ✓Basis for generating & evaluating strategic options ✓Are dynamic in nature Ch 3 -34 Asres Abitie (PhD)  Mission & Customer Orientation ◼ 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 Ch 3 -35 Asres Abitie (PhD)  Mission & Customer Orientation An Effective Mission Statement -- ◼ Anticipates customer needs ◼ Identifies customer needs ◼ Provides product/service to satisfy needs Ch 3 -36 Asres Abitie (PhD)  Good Mission Statements Identify the Utility of A Firm’s Products to Its Customers ◼ Do not offer me things! ◼ Do not offer me clothes. Offer me attractive looks. ◼ Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking. ◼ Do not offer me a house. Offer me security, comfort, and a place that is clean and happy. ◼ Do not offer me books. Offer me hours of pleasure and the benefit of knowledge. ◼ Do not offer me CDs. Offer me leisure and the sound of music. ◼ Do not offer me tools. Offer me the benefits and the pleasure that come from making beautiful things. ◼ Do not offer me furniture. Offer me comfort and the quietness of a cozy place. ◼ Do not offer me things. Offer me ideas, emotions, ambience, feelings, and benefits. ◼ Please, do not offer me things! Ch 2 -37 Asres Abitie (PhD)  Social Policy & Mission Managerial philosophy shapes social policy -- ◼ Affects development of vision & mission ◼ Responsibilities to – ❑ Consumers ❑ Environmentalists ❑ Minorities ❑ Communities Ch 3 -38 Asres Abitie (PhD)  Social Policy & Mission Social policy should be integrated in all strategic-management activities Mission should convey the social responsibility of the firm Ch 3 -39 Asres Abitie (PhD)  Vision & Mission Research results are mixed, however, firms with formal mission statements generally see a: ◼ 2x average return on shareholder’s equity ◼ Positive relationship to company performance ◼ 30% higher return on certain financial measures Ch 3 -40 Asres Abitie (PhD)  Products Services Markets Customers Technology Mission Employees Elements Survival Growth Profit Public Image Self-Concept Philosophy Ch 3 -41 Asres Abitie (PhD) PepsiCo Mission PepsiCo’s 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 our consumers 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 highest standards of integrity. Ch 3 -42 Asres Abitie (PhD) Ben & Jerry’s Mission Ben & Jerry’s mission is to make, distribute and sell the finest quality all-natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products. To operate the Company on a sound financial basis of profitable growth, increasing value for our shareholders, and creating career opportunities and financial rewards for our employees. To operate the Company in a way that actively recognizes the central role that business plays in the structure of society by initiating innovative ways to improve the quality of life of a broad community—local, national and international. Ch 3 -43 Asres Abitie (PhD)  Mission Statement Evaluation Matrix COMPONENTS Concern for Survival, Products Growth, Organization Customers Services Markets Profitability Technology PepsiCo Yes No No Yes No Ben & Jerry's No Yes Yes Yes No Ch 3 -44 Asres Abitie (PhD)  Mission Statement Evaluation Matrix COMPONENTS Self- Concern for Concern for Organization Philosophy Concept Public Image Employees PepsiCo Yes No No No Ben & Jerry's No Yes Yes Yes Ch 3 -45 Asres Abitie (PhD)  For Review (Chapter 3) Key Terms & Concepts Concern for Employees Customers Concern for Public Image Markets Survival, Growth, & Mission Statement Profitability Components Creed Statement Managerial Philosophy Ch 3 -46 Asres Abitie (PhD)  For Review (Chapter 3) Key Terms & Concepts Self Concept Stakeholders Social Policy Vision Statement Ch 3 -47 Asres Abitie (PhD)