Week 8 CSTRATMA PDF

Vision and Mission Analysis CSTRATMA Vision and mission Studying the vision and mission of a company, may be done by focusing to the time when the business first started. Starting a new business rests on a set of beliefs that the new organization can offer some product or s...

Vision and Mission Analysis CSTRATMA Vision and mission Studying the vision and mission of a company, may be done by focusing to the time when the business first started. Starting a new business rests on a set of beliefs that the new organization can offer some product or service to some customers, in some geographic area, using some type of technology, at a profitable price. Vision and mission A new business owner typically believes that the management philosophy of the new enterprise will result in a favorable public image and that this concept of the business can be communicated to, and will be adopted by, important constituencies. When the set of beliefs about a business at its inception is put into writing, the resulting document mirrors the same basic ideas that underlie the vision and mission statements. Vision Statement It is especially important for managers and executives in any organization to agree on the basic vision that the firm strives to achieve in the long term. A vision statement should answer the basic question, “What do we want to become?” A clear vision provides the foundation for developing a comprehensive mission statement. Many organizations have both a vision and mission statement, but the vision statement should be established first and foremost. The vision statement should be short, preferably one sentence, and as many managers as possible should have input into developing the statement. Vision Statement Analysis At a minimum, a vision statement should reveal the type of business the firm engages. Vision Statement Analysis Starbucks Vision Statement (paraphrased) Starbucks strives to be the premier roaster and retailer of specialty coffee globally. Starbucks “Improved” Vision Statement Starbucks’ vision is to be the most well-known, specialty coffee, tea, and pastry restaurant in the world, offering sincere customer service, a welcoming atmosphere, and unequaled quality. Comments The first vision statement does not state what the company wants to become. Nor does it acknowledge the firm’s movement into specialty tea offerings. It is not as customer- oriented as needed. The improved vision statement reveals the company’s aspirations for the future and acknowledges that upscale tea and pastries complement their premium coffee offerings. Mission Statement Peter Drucker, who is often called “the father of modern management”, “the preeminent management thinker of our time.” “What is our business?” is synonymous with asking the question “What is our mission?” An enduring statement of purpose that distinguishes one organization from other similar enterprises, the mission statement is a declaration of an organization’s “reason for being.” It answers the pivotal question “What is our business?” A clear mission statement is essential for effectively establishing objectives and formulating strategies. Mission Statement Sometimes called a creed statement, a statement of purpose, a statement of philosophy, a statement of beliefs, a statement of business principles, or a statement “defining our business,” a mission statement reveals what an organization wants to be and whom it wants to serve. Mission Statement A business mission is the foundation for priorities, strategies, plans, and work assignments. It is the starting point for the design of managerial jobs and, above all, for the design of managerial structures. Nothing may seem simpler or more obvious than to know what a company’s business is. Vision vs. Mission 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?” Many organizations have both a mission and vision statement. It can be argued that profit, not mission or vision, is the primary corporate motivator. But profit alone is not enough to motivate people. Profit is perceived negatively by some employees in companies. Employees may see profit as something that they earn and management then uses and even gives away to shareholders. 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. A widely used approach to developing a vision and mission statement is first to select several articles about these statements and ask all managers to read these as background information. Then ask managers themselves to prepare a vision and mission statement for the organization. Developing Vision and mission Statements A facilitator, or committee of top managers, should then merge these statements into a single document and distribute the draft statements to all managers. A request for modifications, additions, and deletions is needed next, along with a meeting to revise the document. To the extent that all managers have input into and support the final documents, organizations can more easily obtain managers’ support for other strategy formulation, implementation, and evaluation activities. Thus, the process of developing a vision and mission statement represents a great opportunity for strategists to obtain needed support from all managers in the firm. Developing Vision and mission Statements During the process of developing vision and mission statements, some organizations use discussion groups of managers to develop and modify existing statements. Some organizations hire an outside consultant or facilitator to manage the process and help draft the language. Sometimes an outside person with expertise in developing such statements, who has unbiased views, can manage the process more effectively than an internal group or committee of managers. Decisions on how best to communicate the vision and mission to all managers, employees, and external constituencies of an organization are needed when the documents are in final form. Some organizations even develop a videotape to explain the statements, and how they were developed. Developing Vision and mission Statements The process of developing a mission statement should create an “emotional bond” and “sense of mission” between the organization and its employees. Importance (Benefits) of vision and Mission statements firms with a formalized mission statement have twice the average return on shareholders’ equity than those firms without a formalized mission statement have; a positive relationship between mission statements and organizational performance firms using mission statements have a 30 percent higher return on certain financial measures than those without such statements Importance (Benefits) of vision and Mission statements 1. To ensure unanimity of purpose within the organization 2. To provide a basis, or standard, for allocating organizational resources 3. To establish a general tone or organizational climate 4. 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 5. To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization 6. To specify organizational purposes and then to translate these purposes into objectives in such a way that cost, time, and performance parameters can be assessed and controlled. Mission statements and divergent views Another benefit of developing a comprehensive mission statement is that divergent views among managers can be revealed and resolved through the process. The question “What is our business?” can create controversy. Mission statements and divergent views “What is our mission?” is a genuine decision; and a genuine decision must be based on divergent views to have a chance to be a right and effective decision. Developing a business mission is always a choice between alternatives, each of which rests on different assumptions regarding the reality of the business and its environment. It is always a high-risk decision. A change in mission always leads to changes in objectives, strategies, organization, and behavior. Characteristics of a mission statement A declaration of attitude A mission statement is more than a statement of specific details; it 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. Second, a mission statement needs to be broad to reconcile differences effectively among, and appeal to, an organization’s diverse stakeholders, the individuals and groups of individuals who have a special stake or claim on the company. A declaration of attitude A mission statement should be reconciliatory. Stakeholders include employees, managers, stockholders, boards of directors, customers, suppliers, distributors, creditors, governments (local, state, federal, and foreign), unions, competitors, environmental groups, and the general public. Stakeholders affect and are affected by an organization’s strategies, yet the claims and concerns of diverse constituencies vary and often conflict. A declaration of attitude The general public is especially interested in social responsibility, whereas stockholders are more interested in profitability. Claims on any business literally may number in the thousands, and they often include clean air, jobs, taxes, investment opportunities, career opportunities, equal employment opportunities, employee benefits, salaries, wages, clean water, and community services. All stakeholders’ claims on an organization cannot be pursued with equal emphasis. A good mission statement indicates the relative attention that an organization will devote to meeting the claims of various stakeholders. The Mission Statement according to George Steiner Most business statements of mission are expressed at high levels of abstraction. Mission statements are not designed to express concrete ends, but rather to provide motivation, general direction, an image, a tone, and a philosophy to guide the enterprise. An excess of detail could prove counterproductive since concrete specification could be the base for rallying opposition. Precision might stifle creativity in the formulation of an acceptable mission or purpose. Once an aim is cast in concrete, it creates a rigidity in an organization and resists change. Vagueness leaves room for other managers to fill in the details, perhaps even to modify general patterns. Vagueness permits more flexibility in adapting to changing environments and internal operations. It facilitates flexibility in implementation. A Good Mission Statement In addition to being broad in scope, an effective mission statement should not be too lengthy; recommended length is less than 250 words. An effective mission statement should arouse positive feelings and emotions about an organization; it should be inspiring in the sense that it motivates readers to action. A mission statement should be enduring. An effective mission statement generates the impression that a firm is successful, has direction, and is worthy of time, support, and investment—from all socioeconomic groups of people. A Good Mission Statement According to Vern McGinnis, a mission statement should (1) define what the organization is and what the organization aspires to be, (2) be limited enough to exclude some ventures and broad enough to allow for creative growth, (3) distinguish a given organization from all others, (4) serve as a framework for evaluating both current and prospective activities, and (5) be stated in terms sufficiently clear to be widely understood throughout the organization. Customer Orientation A good mission statement describes an organization’s purpose, customers, products or services, markets, philosophy, and basic technology. A good mission statement reflects the anticipations of customers. Rather than developing a product and then trying to find a market, the operating philosophy of organizations should be to identify customers’ needs and then provide a product or service to fulfill those needs. Good mission statements identify the utility of a firm’s products to its customers. Customer Orientation 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. Customer Orientation It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or service converts economic resources into wealth and things into goods. What a business thinks it produces is not of first importance, especially not to the future of the business and to its success. What the customer thinks he/she is buying, what he/she considers value, is decisive—it determines what a business is, what it produces, and whether it will prosper. And what the customer buys and considers value is never a product. It is always utility, meaning what a product or service does for him or her. The customer is the foundation of a business and keeps it in existence. Mission Statement 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. 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? To summarize Broad in scope; do not include monetary amounts, numbers, percentages, ratios, or objectives Less than 250 words in length Inspiring Identify the utility of a firm’s products Reveal that the firm is socially responsible Reveal that the firm is environmentally responsible Include nine components customers, products or services, markets, technology, concern for survival/growth/ profits, philosophy, self-concept, concern for public image, concern for employees Reconciliatory Enduring