Chapter 2

The Business Mission

Strategic Management:
Concepts and Cases. 9th edition
Fred R. David

Ch. 2-1
 Chapter Outline

• 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 and Evaluating Mission Statements

Ch. 2-2
 Vision & Mission

Vision is the art of seeing things invisible

-- Jonathan Swift

The very essence of leadership is that

you have to have vision. You can’t blow
an uncertain trumpet.
-- Theodore Hesburgh
Ch. 2-3
 Vision
Management and executive agreement on the
basic vision for which the firm strives to
achieve in the long run is critically important.

Vision statement answers the question:

“What do we want to become?”

Ch. 2-4
 Vision
Clear vision

– Provides foundation for comprehensive

mission statement

• Vision statement developed first

• Short – preferably one sentence
• Broad management involvement
Ch. 2-5
 Vision Statements

The Vision of the National Pawnbrokers

Association is to have complete and vibrant
membership that enjoys a positive public and
political image and is the focal organization of all
pawn associations.

--National Pawnbrokers Association

Ch. 2-6
 Vision Statements
The Bellevue Hospital is the LEADER in providing
resources necessary to realize the community’s
highest level of HEALTH throughout life.
--The Bellevue Hospital

To be the first choice in the printed communications

business. The first choice is the best choice, and
being the best is what Atlanta Web pledges to work
hard at being - every day!
--Atlanta Web Printers, Inc.
Ch. 2-7
 Vision Statements

It is the vision of the California Energy

Commission for Californians to have
energy choices that are affordable,
reliable, diverse, safe, and
environmentally acceptable.

--California Energy Commission

Ch. 2-8
 Mission Statements

Recent Data indicate that:

– 90% of all companies have used a mission
statement sometime in the previous five
years.

Mission statement answers the question:

“What is our business?”

Ch. 2-9
 Mission Statements
Mission Statement:

– Enduring statement of purpose

– Distinguishes one organization from
another in similar enterprises
– Declaration of an organization’s “reason for
being”

Ch. 2-10
 Mission Statements
Mission Statements also referred to as:

– Creed statement
– Statement of purpose
– Statement of philosophy
– Statement of business principles
– Reveal what an organization wants to be and
whom it wants to serve
– Essential for effectively establishing objectives
and formulating strategies
Ch. 2-11
 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

Ch. 2-12
 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

Ch. 2-13
 Mission Statements
Mission Statement

“The Bellevue Hospital, with respect,

compassion, integrity, and courage, honors
the individuality and confidentiality of our
patients, employees, and community, and is
progressive in anticipating and providing
future health care services.”

Ch. 2-14
 Mission Statements
The Mission of USGS is to serve the Nation by providing
reliable scientific information to

• Describe and understand the Earth;

• Minimize loss of life and property from natural disasters;
• Manage water, biological, energy, and mineral resources;
and enhance and protect our quality of life.

“It is the California Energy Commission’s mission to assess,

advocate, and act through improve energy systems that
promote a strong economy and a healthy environment.”
Ch. 2-15
Mission Statements

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

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
Ch. 2-18
 Mission Characteristics
Effective mission statements:
• 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
• Reflect judgments re: future growth
• Provide criteria for selecting strategies
• Basis for generating & screening strategic options
• Are dynamic in orientation Ch. 2-19
 Customer Orientation
According to Vern McGinnis, 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
Ch. 2-20
 Customer Orientation
A good mission statement reflects the
anticipations of customers.

• Identify customer needs

• Provide product/service to satisfy needs
 AT&T’s mission focuses on communications, not
telephones
 Exxon’s mission focuses on energy, not on oil
and gas

Ch. 2-21
 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
• Social policy should be integrated in all
strategic-management activities.
• Mission statement is an effective instrument for
conveying the social responsibility of the firm.
Ch. 2-22
 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.
Ch. 2-23
 Mission Components

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
Ch. 2-24
 Components of Mission
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?”
• Markets:
“Geographically, where does the firm compete?”
• Technology:
“Is the firm technologically current?” Ch. 2-25
 Components of Mission
• 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?”
• 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?” Ch. 2-26
Importance of Vision & Mission
Although research results are mixed, firms with
formal mission statements…

• 2X average return on shareholder’s equity

• Positive relationship to organizational performance

• 30% higher return on certain financial measures

Ch. 2-27
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.

Ch. 2-28
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.
Ch. 2-29
 Evaluation Matrix of Mission Statements

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. 2-30
 Evaluation Matrix of Mission Statements

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. 2-31
 Key Terms & Concepts
• Concern for Employees
• Concern for Public Image
• Concern for Survival, Growth, and Profitability
• Creed Statement
• Customers
• Markets
• Mission Statement Components
• Philosophy
• Self-Concept
• Social Policy
• Stakeholders
• Vision Statement
Ch. 2-32