The Business Vision & Mission
Week 02
W. Rofianto, ST, MSi
Today Agenda
What Do We Want to Become?
What Is Our Business?
Importance of Vision and Mission Statements
Characteristics of a Mission Statement
Components of a Mission Statement
Writing & Evaluating Mission Statements
Vision
“The last thing IBM needs right now is a vision.” (July 1993)
“What IBM needs most right now is a vision.” (March 1996)
– Louis V. Gerstner, Jr., CEO, IBM Corporation
“What do we want to become?”
Clear Business
Vision
Comprehensive
Mission Statement
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.
Shared Vision
Creates commonality of interests
Reduce daily monotony
Provides opportunity & challenge
Profit & vision are necessary to
effectively motivate a workforce
Vision Statement Examples
General Motors’ vision is to be the world leader in
transportation products and related services.
PepsiCo’s responsibility is to continually improve
all aspects of the world in which we operate –
environment, social, economic – creating a better
tomorrow than today.
Dell’s vision is to create a company culture where
environmental excellence is second nature.
Mission Statements
90% of all companies have used a mission statement in the
previous five years
“What is our business?”
Enduring statement of purpose
Distinguishes one firm from another
Declares the firm’s reason for being
Also referred to as : Creed statement, Statement of purpose,
Statement of philosophy, Statement of business principles
Mission Statements
Reveal what an organization wants to be
and whom it wants to serve
Essential for effectively establishing objectives
and formulating strategies
Clear mission is needed before alternative
strategies can be formulated and implemented
Participation from diverse managers
is important in developing the mission
Many organizations develop both vision & mission statements
Importance of Mission
Benefits from a strong mission
Ensure Unanimity of Purpose
Provide a basis of Resource Allocation
Establish Organizational Climate
Focal Point to identify or deter
Research results are mixed, however, firms with formal
mission statements generally show:
2x average return on shareholders’ equity
Positive relationship to company performance
30% higher return on certain financial measures
Effective Missions
Broad in scope
Generate strategic alternatives
Not overly specific
Reconciles interests among diverse stakeholders
Finely balanced between specificity & generality
Basis for generating & evaluating strategic options
Provide criteria for strategy selection
Generate favorable impression of the firm
Arouse positive feelings & emotions
Motivate readers to action
Reflect future growth
Are dynamic in nature
Natural Environmental Perspective
Is Your Firm Environmentally Proactive?
Preserving the natural resources is good business!
Reactive environmental policies can be expensive
Proactive policies force companies to innovate and
upgrade processes
Mission and Customer Orientation
An Effective Mission Statement
Anticipates customer needs
Identifies customer needs
Provides product/service to satisfy needs
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 bring happiness
Social Policy and Mission
Managerial philosophy shapes social policy
Affects development of vision & mission
Social policy should be integrated in all strategicmanagement activities
Mission should convey the social responsibility of the firm
Responsibilities to
Consumers
Environmentalists
Minorities
Communities
Mission Statement
2007 Most Admired in Social Responsibility
1.
2.
3.
4.
5.
CHS
United Parcel Service
Whole Foods Market
McDonald’s
Alcan
6.
7.
8.
9.
10.
YRC Worldwide
Starbucks
International Paper
Vulcan Materials
Walt Disney
2007 Least Admired in Social Responsibility
1.
2.
3.
4.
5.
Visteon
Dana
CA
Delphi
Federal-Mogul
6.
7.
8.
9.
10.
Arvin Meritor
Huntsman
Navistar International
Lyondell Chemical
Toys “R” Us
Characteristics of a Mission Statement
Broad in scope
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
1) customers, 2) products or services, 3) markets, 4)
technology, 5) concern for survival/growth/profits, 6)
philosophy, 7) self-concept, 8) concern for public image, 9)
concern for employees
Enduring
Mission Statement Examples
Dell’s mission is to be the most successful computer
company in the world at delivering the best customer
experience in markets we serve. In doing so, Dell will
meet consumer expectations of highest quality;
leading technology; competitive pricing; individual
and company accountability; best-in-class service and
support; flexible customization capability; superior
corporate citizenship; financial stability.
Proctor & Gamble will provide branded products and
services of superior quality and value that improve the
lives of the world’s consumers. As a result, consumers
will reward us with industry leadership in sales, profit,
and value creation, allowing our people, our
shareholders, and the communities in which we live
and work to prosper.
Mission Statement Evaluation Matrix
Component
Organization
Customers
Products or
Services
Markets
Concern for
Survival,
Growth,
Profitability
Dell
Yes
Yes
Yes
Yes
Proctor &
Gamble
Yes
No
Yes
Yes
Philosophy
SelfConcept
Concern for
Public
Image
Concern for
Employees
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Technology