chapter 2 the business mission - gunadarma...

Fred R. David

Prentice Hall

Ch. 2-1

Chapter 2

The Business Mission

Strategic Management:

Concepts and Cases. 9th edition

Fred R. David

Fred R. David

Prentice Hall

Ch. 2-2

Chapter Outline

• What Do We Want to Become?

• What Is Our Business?

• Importance of Vision and Mission

Statements

Fred R. David

Prentice Hall

Ch. 2-3

Chapter Outline

• Characteristics of a Mission Statement

• Components of a Mission Statement

• Writing and Evaluating Mission

Statements

Fred R. David

Prentice Hall

Ch. 2-4

Vision

Management and executive agreement on

the basic vision for which the firm strives

to achieve in the long run is critically

important.

Fred R. David

Prentice Hall

Ch. 2-5

Vision statement answers the question:

“What do we want to become?”

Vision

Fred R. David

Prentice Hall

Ch. 2-6

Clear vision

– Provides foundation for comprehensive

mission statement

Vision

Fred R. David

Prentice Hall

Ch. 2-7

Vision & Mission

• Vision statement developed first

• Short – preferably one sentence

• Broad management involvement

Fred R. David

Prentice Hall

Ch. 2-8

Mission Statements

Recent Data indicate that:

– 90% of all companies have used a mission

statement sometime in the previous five

years.

Fred R. David

Prentice Hall

Ch. 2-9

Mission Statements

Mission statement answers the question:

“What is our business?”

Fred R. David

Prentice Hall

Ch. 2-10

Mission Statements

Mission Statement:

– Enduring statement of purpose

– Distinguishes one organization from

another in similar enterprises

– Declaration of an organization’s ―reason for

being‖

Fred R. David

Prentice Hall

Ch. 2-11

Mission Statements

Mission Statements also referred to as:

– Creed statement

– Statement of purpose

– Statement of philosophy

– Statement of business principles

Fred R. David

Prentice Hall

Ch. 2-12

Mission Statements

Mission Statements

– Reveal what an organization wants to be

and whom it wants to serve

Fred R. David

Prentice Hall

Ch. 2-13

Mission Statements

Mission Statements

– Essential for effectively establishing

objectives and formulating strategies

Fred R. David

Prentice Hall

Ch. 2-14

Vision and Mission

• Many organizations develop both vision

and mission statements

• Profit and vision are necessary to

effectively motivate a workforce

• Shared vision creates a commonality of

interests

Fred R. David

Prentice Hall

Ch. 2-15

Developing Vision & Mission

• Clear mission is needed before

alternative strategies can be formulated

and implemented

• Important to have as broad range of

participation as possible among

managers in developing the mission

Fred R. David

Prentice Hall

Ch. 2-16

Importance of Mission

• Unanimity of purpose within the organization

• Basis for allocating resources

• Establish organizational climate

• Focal point for direction

• Translate objectives into work structure

• Cost, time and performance parameters assessed and controlled

Fred R. David

Prentice Hall

Ch. 2-17

Mission Characteristics

Effective mission statements:

• Broad in scope

• Generate range of feasible strategic alternatives

• Not excessively specific

• Reconcile interests among diverse stakeholders

• Finely balanced between specificity & generality

Fred R. David

Prentice Hall

Ch. 2-18


• Arouse positive feelings and emotions

• Motivate readers to action

• Generate the impression that firm is

successful, has direction, and is worthy of

time, support, and investment


Fred R. David

Prentice Hall

Ch. 2-19


• Reflect judgments re: future growth

• Provide criteria for selecting strategies

• Basis for generating & screening strategic

options

• Are dynamic in orientation


Fred R. David

Prentice Hall

Ch. 2-20

Customer Orientation

Mission should:

• Define what the organization is

• Define what the organization aspires to be

• Limited to exclude some ventures

• Broad enough to allow for creative growth

• Distinguish the firm from all others

• Serve as framework to evaluate current activities

• Stated clearly so that it is understood by all

Fred R. David

Prentice Hall

Ch. 2-21

A good mission statement reflects the

anticipations of customers.

• Identify customer needs

• Provide product/service to satisfy needs

Customer Orientation

Fred R. David

Prentice Hall

Ch. 2-22

Social Policy & Mission

Managerial philosophy and thinking at the

highest levels in the organization reflect

social policy.

• Affects development of vision & mission

• Responsibilities to consumers,

environmentalists, minorities,

communities, & other groups

Fred R. David

Prentice Hall

Ch. 2-23

• Social policy should be integrated in all

strategic-management activities.

• Mission statement is an effective

instrument for conveying the social

responsibility of the firm.

Social Policy & Mission

Fred R. David

Prentice Hall

Ch. 2-24

Components of Mission

Mission statements vary in…

Length

Content

Format

Specificity

Must include the 9 elements, as the mission statement is the most public and visible part of the strategic-management process.

Fred R. David

Prentice Hall

Ch. 2-25

1. Customers

2. Products or services

3. Markets

4. Technology

5. Survival, growth, and profitability

6. Philosophy

7. Self-concept

8. Concern for public image

9. Concern for employees

Mission Components

Fred R. David

Prentice Hall

Ch. 2-26


Components of mission and corresponding questions to be answered:

• Customers:

―Who are the firm’s customers?‖

• Products or services:

―What are the firm's major products or services?‖

Fred R. David

Prentice Hall

Ch. 2-27


• Markets:

―Geographically, where does the firm

compete?‖

• Technology:

―Is the firm technologically current?‖

Fred R. David

Prentice Hall

Ch. 2-28


• Concern for survival, growth, and

profitability:

―Is the firm committed to growth and

financial soundness?‖

• Philosophy:

―What are the basic beliefs, values,

aspirations, and ethical priorities of the

firm?‖

Fred R. David

Prentice Hall

Ch. 2-29


• Self-concept:

―What is the firm’s distinctive competence or major

competitive advantage?‖

• Concern for public image:

―Is the firm responsive to social, community, and

environmental concerns?‖

• Concern for employees:

―Are employees a valuable asset of the firm?‖

Fred R. David

Prentice Hall

Ch. 2-30

PepsiCo Mission Statement

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.

Fred R. David

Prentice Hall

Ch. 2-31

Ben & Jerry’s Mission Statement

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.

Fred R. David

Prentice Hall

Ch. 2-32

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

Evaluation Matrix of Mission Statements

Fred R. David

Prentice Hall

Ch. 2-33

Evaluation Matrix of Mission Statements

COMPONENTS

Organization Philosophy

Self-

Concept

Concern for

Public Image

Concern for

Employees

PepsiCo Yes No No No

Ben & Jerry's No Yes Yes Yes

chapter 2 the business mission - gunadarma...

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