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?”

ComprehensiveMission Statement

Clear BusinessClear BusinessVision

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

� 2x average return on shareholders’ equity

� Positive relationship to company performance

� 30% higher return on certain financial measures

Research results are mixed, however, firms with formal mission statements generally show:

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 strategic-management 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. CHS2. United Parcel Service3. Whole Foods Market4. McDonald’s5. Alcan

6. YRC Worldwide7. Starbucks8. International Paper9. Vulcan Materials10. Walt Disney

2007 Least Admired in Social Responsibility

1. Visteon2. Dana3. CA4. Delphi5. Federal-Mogul

6. Arvin Meritor7. Huntsman8. Navistar International9. Lyondell Chemical10. 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 computercompany in the world at delivering the best customerexperience in markets we serve. In doing so, Dell willmeet consumer expectations of highest quality;leading technology; competitive pricing; individualand company accountability; best-in-class service andsupport; flexible customization capability; superiorcorporate citizenship; financial stability.

Proctor & Gamble will provide branded products andservices of superior quality and value that improve thelives of the world’s consumers. As a result, consumerswill reward us with industry leadership in sales, profit,and value creation, allowing our people, ourshareholders, and the communities in which we liveand work to prosper.

Organization

Component

Customers

Products or

Services Markets

Concern for

Survival,

Growth,

Profitability Technology Philosophy

Self-

Concept

Concern for

Public

Image

Concern for

Employees

Dell Yes Yes Yes Yes Yes Yes Yes Yes No

Proctor & Gamble

Yes No Yes Yes Yes Yes Yes Yes Yes

Mission Statement Evaluation Matrix