Defining the Firm’s Mission and Social

Responsibility

What is a Company Mission?

The fundamental purpose that sets a firm apart from other firms of its type and identifies the scope of its operations in product and market terms

Characteristics of a Mission Statement

• Embodies the business philosophy / image

• May Indicate • firm’s principal product or service areas• primary customer needs the firm will

attempt to satisfy

Example: Mission Statement

Intel’s core mission is being the building block supplier

to the Internet economy and spurring efforts to make

the Internet more useful. Being connected is now at

the center of people’s computing experience. We are

helping to expand the capabilities of the PC platform

and the Internet.

Example: Mission Statement

Our mission is to connect more people and

organizations to information in more innovative,

simple, and reliable ways than any other

networking company in the world.

Newest Trends in MissionComponents

• Sensitivity to customer wants• “The customer is our top priority!”• Emphasis on extensive product safety programs

• Concern for quality• “Quality is job one!” (Ford)• New philosophy – quality is the norm …

Newest Trends in MissionComponents

• Statements of company vision…

“Management’s job is not to just

see the company as it is….but as

it can become.”

Example: Mission and Vision Statement

Our mission is to connect more people and

organizations to information in more innovative,

simple, and reliable ways than any other

networking company in the world. Our vision of

pervasive networking is of a world where

connections are simpler, more powerful, more

affordable, more global, and more available to all.

Responsibilities of theBoard of Directors

• To establish and update the company mission

• To elect the company’s top officers … CEO …

• To set broad company policy and set company objectives

• » BUT … problems can arise …

Agency Theory

• Involves separation of owners (principals) and managers (agents) of a firm• Potential exists for owners’ wishes to be ignored

• Involves delegation of decision-making authority by owners to managers

• Potential agency costs can include• Agency problems

• Actions taken to minimize agency problems

Corporate Social Responsibility’s Effect on the

Mission Statement

• In developing mission statements, managers must identify all stakeholder groups and weigh their relative rights and abilities to affect the firm’s success• Some companies are proactive in their approach to

CSR, making it an integral part of their mission (e.g., Ben and Jerry’s ice cream) http://www.benjerry.com/

• Others are reactive, adopting socially responsible behavior only when they must (e.g., Exxon after the Valdez incident) exxon