002-The-Business-Vision-and-Mission.pdf

The Business Vision and Mission Chapter Objectives ❏ Describe the nature and role of vision and mission statements in strategic management. ❏ Discuss why the process of developing a mission statement is as important as the resulting document. ❏ Identify the components of mission state...

The Business Vision and Mission Chapter Objectives ❏ Describe the nature and role of vision and mission statements in strategic management. ❏ Discuss why the process of developing a mission statement is as important as the resulting document. ❏ Identify the components of mission statements. ❏ Discuss how clear vision and mission statements can benefit other strategic-management activities. ❏ Evaluate mission statements of different organizations. ❏ Write good vision and mission statements. Notable quote "A corporate vision can focus, direct, motivate, unify, and even excite a business into superior performance. The job of a strategist is to identify and project a clear vision." —John Keane MISSION AND VISION STATEMENTS EXPLAINED These statements are the words leaders use to explain an organization’s purpose and direction. When expressed clearly and concisely, they can motivate your team or the organization as a whole with an inspiring vision of the future. ➔ Vision and mission statements often can be found in the front of annual reports. ➔ Displayed throughout a firm’s premises ➔ Part of internal reports: ◆ Loan requests ◆ Supplier agreements ◆ Labor relations contracts ◆ Business plans ◆ Customer service agreements  PURPOSE Mission statements define the firm’s or organization’s purpose and primary objectives. These statements are set in the present tense, and they explain why you exist as a business, both to members of the organization and to people outside it. Mission statements tend to be short, clear and powerful. Vision statements also define your organization’s purpose, but they focus on its goals and aspirations. These statements are designed to be uplifting and inspiring. They’re also timeless: even if the organization changes its strategy, the vision will often stay the same.  Vision Statement ➔ A vision statement is what the firm strives to achieve in the long term. It should answer the basic question, “What do we want to become?” ➔ Preferably one sentence ➔ As many managers as possible should have input in developing the statement. Vision Statement Examples: 1. General Motors- A world with zero crashes, zero emissions and zero congestion. 2. IKEA- To create a better everyday life for the many people. 3. Procter & Gamble’s vision is to be, and be recognized as, the best consumer products company in the world.  Mission Statement “What is our business?” is synonymous with asking the question “What is our mission?” ➔ declaration of an organization’s “reason for being.” ➔ essential for effectively establishing objectives and formulating strategies. ➔ Sometimes called “creed statement” ◆ a statement of purpose ◆ a statement of philosophy ◆ a statement of beliefs ◆ a statement of business principles  Nine components of a good Mission Statement 1. Customers- Who are the firm’s customers? 2. Products/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- 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?  Characteristics of a Mission Statement A mission statement is more than a statement of specific details. ❑ it is a declaration of attitude and outlook. Do not include monetary amounts, numbers, percentages, ratios, or objectives. ❏ Reconciliatory - A good mission statement indicates the relative attention that an organization will devote to meeting the claims of various stakeholders. ❏ 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. ❏ General public- social responsibility ❏ Stockholders- profitability ❏ Claims on any organization- clean air, jobs, taxes, investment opportunities, career opportunities, equal employment opportunities, employee benefits, salaries, wages, clean water, and community services.  Characteristics of a Mission Statement ❏ An effective mission statement should not be too lengthy; recommended length is less than 250 words. ❏ Inspiring. An effective mission statement should awaken positive feelings and emotions about an organization; motivates readers to action. ❏ A mission statement should be enduring. (stand the test of time) ❏ Identify the utility of a firm’s products ❏ Reveal that the firm is socially responsible  Characteristics of a Mission Statement ❏ 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 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. It reflects judgments about future growth directions and strategies that are based on forward-looking external and internal analyses.  How to create a Mission Statement Step 1: Develop Your Winning Idea Identify your organization’s “winning idea” or unique selling proposition (USP). It is the idea or approach that makes your organization stand out from its competitors, and it is why customers come to you and not your competitors. Step 2. Clarify Your Goal Make a short list of the most critical measures of success for this idea. For instance, if your winning idea is to create a cutting-edge products in a particular area or provide excellent customer service in an area, what key performance indicator will let you know that your customers are delighted? Again, you don’t have to include exact figures here, but its essential to have a general idea of what success looks like so that you know when you’ve achieved it. Keep this sentence in the present tense, and make sure it is short, simple, straightforward, and free of jargon. The language needs to be inspiring, but don’t include objectives, just so it “sounds better.” Example Mission Statements Procter & Gamble will provide branded products and services of superior quality and value (7) that improve the lives of the world’s (3) consumers. As a result, consumers (1) will reward us with industry leadership in sales, profit (5), and value creation, allowing our people (9), our shareholders, and the communities (8) in which we live and work to prosper.  Example Mission Statements Fleetwood Enterprises will lead the recreational vehicle and manufactured housing industries (2, 7) in providing quality products, with a passion for customer-driven innovation (1). We will emphasize training, embrace diversity and provide growth opportunities for our associates and our dealers (9). We will lead our industries in the application of appropriate technologies (4). We will operate at the highest levels of ethics and compliance with a focus on exemplary corporate governance (6). We will deliver value to our shareholders, positive operating results and industry-leading earnings (5).  How to Create a Vision Statement Step 1: Find the Human Value in Your Work Identify your organization’s mission. Then uncover the natural, human value in that mission. For example, how does your organization improve people’s lives? How do you make the world a better place? Step 2: Distill into Values Identify what you, your customers, and other stakeholders value the most about how your organization will achieve this mission. Distill these into values that your organization has, or should have. Some examples of values include excellence, integrity, teamwork, originality, equality, honesty, freedom, service and strength. What values do you think the organization stands for, or that it should stand for? Step 3: Combine Your Mission and Values Combine your mission and values, and polish your words until you have an inspiring statement that will energize people, inside and outside your organization. It should be broad and timeless, and it should explain why the people in your organization do what they do.  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 the 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 conflicting views among managers. Ten Benefits of Having a Clear Mission and Vision 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. Examples of the Nine Essential Components of a Mission Statement 1.Customers ❏ We believe our first responsibility is to the doctors, nurses, patients, mothers, and all others who use our products and services. (Johnson & Johnson) ❏ To earn our customers’ loyalty, we listen to them, anticipate their needs, and act to create value in their eyes. (Lexmark International) 2.Products or Services ❏ AMAX’s principal products are molybdenum, coal, iron ore, copper, lead, zinc, petroleum and natural gas, potash, phosphates, nickel, tungsten, silver, gold, and magnesium. (AMAX Engineering Company) ❏ Standard Oil Company (Indiana) is in business to find and produce crude oil, natural gas, and natural gas liquids; to manufacture high-quality products useful to society from these raw materials; and to distribute and market those products and to provide dependable related services to the consuming public at reasonable prices. (Standard Oil Company) Examples of the Nine Essential Components of a Mission Statement 3.Markets ❏ We are dedicated to the total success of Corning Glass Works as a worldwide competitor. (Corning Glass Works) ❏ Our emphasis is on North American markets, although global opportunities will be explored. (Blockway) 4.Technology ❏ Control Data is in the business of applying micro-electronics and computer technology in two general areas: computer-related hardware; and computing- enhancing services, which include computation, information, education, and finance. (Control Data) ❏ We will continually strive to meet the preferences of adult smokers by developing technologies that have the potential to reduce the health risks associated with smoking. (RJ Reynolds) Examples of the Nine Essential Components of a Mission Statement 5.Concern for Survival, Growth, and Profitability ❏ In this respect, the company will conduct its operations prudently and will provide the profits and growth which will assure Hoover’s ultimate success. (Hoover Universal) ❏ To serve the worldwide need for knowledge at a fair profit by adhering, evaluating, producing, and distributing valuable information in a way that benefits our customers, employees, other investors, and our society. (McGraw-Hill) 6.Philosophy ❏ Our world-class leadership is dedicated to a management philosophy that holds people above profits. (Kellogg) ❏ It’s all part of the Mary Kay philosophy—a philosophy based on the golden rule. A spirit of sharing and caring where people give cheerfully of their time, knowledge, and experience. (Mary Kay Cosmetics) Examples of the Nine Essential Components of a Mission Statement 7. Self-Concept ❏ Crown Zellerbach is committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of its employees. (Crown Zellerbach) 8. Concern for Public Image ❏ To share the world’s obligation for the protection of the environment. (Dow Chemical) ❏ To contribute to the economic strength of society and function as a good corporate citizen on a local, state, and national basis in all countries in which we do business. (Pfizer) Examples of the Nine Essential Components of a Mission Statement 9. Concern for Employees ❏ To recruit, develop, motivate, reward, and retain personnel of exceptional ability, character, and dedication by providing good working conditions, superior leadership, compensation on the basis of performance, an attractive benefit program, opportunity for growth, and a high degree of employment security. (The Wachovia Corporation) ❏ To compensate its employees with remuneration and fringe benefits competitive with other employment opportunities in its geographical area and commensurate with their contributions toward efficient corporate operations. (Public Service Electric & Gas Company) Writing and Evaluating Mission Statements ➔ There is no one best mission statement for an organization. ➔ Good judgement is required in evaluating mission statements. ➔ Ideally a statement would provide more than simply inclusion of a single word such as “products” or “employees” regarding a respective component. ➔ The statement should be informative, inspiring, enduring, and serve to motivate stakeholders to action. ➔ Evaluation of a mission statement regarding inclusion of the nine components is just the beginning of the process to assess a statement’s overall effectiveness. End of Presentation. Thank you! Question and Answer session. Be ready for an activity.  Group activity: ❑ Form groups with 8 students each ❑ DEVELOP A VISION AND MISSION STATEMENT FOR OUR SCHOOL (Colegio de Calumpit Inc.) Prepare a ppt presentation to be presented to class. (maximum 3 pages) PRELIM PROJECT: ❑ REVISE AN EXISTING VISION & MISSION STATEMENT OF YOUR CHOSEN COMPANY. Label the Mission Statement with all the 9 components of a good mission statement. Present your work to the class. Submit your revised vision & mission in the prescribed format.