Copyright2007PrenticeHallCh2-1Chapter2TheBusinessVision&MissionStrategicManagement:Concepts&Cases11thEditionFredDavidCopyright2007PrenticeHallCh2-2ChapterOutlineWhatdowewanttobecome?Whatisourbusiness?ImportanceofVisionandMissionStatementsCopyright2007PrenticeHallCh2-3ChapterOutline(cont’d)CharacteristicsofamissionstatementComponentsofamissionstatementWriting&evaluatingmissionstatementsCopyright2007PrenticeHallCh2-4VisionAgreementonthebasicvisionforwhichthefirmstrivestoachieveinthelongruniscriticallyimportanttothefirm’ssuccess.Copyright2007PrenticeHallCh2-5“Whatdowewanttobecome?”VisionCopyright2007PrenticeHallCh2-6ComprehensiveMissionStatementVisionClearBusinessVisionCopyright2007PrenticeHallCh2-7SharedVision--CreatescommonalityofinterestsReducedailymonotonyProvidesopportunity&challengeVision&MissionCopyright2007PrenticeHallCh2-8“Whatisourbusiness?”MissionStatementsCopyright2007PrenticeHallCh2-9MissionStatements•Enduringstatementofpurpose•Distinguishesonefirmfromanother•Declaresthefirm’sreasonforbeingCopyright2007PrenticeHallCh2-10MissionStatements•Creedstatement•Statementofpurpose•Statementofphilosophy•StatementofbusinessprinciplesAlsoreferredtoas:Copyright2007PrenticeHallCh2-11Copyright2007PrenticeHallCh2-12RevealwhatanorganizationwantstobeandwhomitwantstoserveMissionStatementsEssentialforeffectivelyestablishingobjectivesandformulatingstrategiesCopyright2007PrenticeHallCh2-13Vision&MissionManyorganizationsdevelopbothvision&missionstatementsCopyright2007PrenticeHallCh2-14Vision&MissionProfit&visionarenecessarytoeffectivelymotivateaworkforceCopyright2007PrenticeHallCh2-15Vision&MissionSharedvisioncreatesacommunityofinterestsCopyright2007PrenticeHallCh2-16DevelopingVision&MissionClearmissionisneededbeforealternativestrategiescanbeformulatedandimplementedCopyright2007PrenticeHallCh2-17DevelopingVision&MissionParticipationfromdiversemanagersisimportantindevelopingthemissionCopyright2007PrenticeHallCh2-18ImportanceofMissionMissionResourceAllocationUnanimityofPurposeOrganizationalClimateFocalpointforworkstructureBenefitsfromastrongmissionCopyright2007PrenticeHallCh2-19BroadinscopeGeneratestrategicalternativesNotoverlyspecificReconcilesinterestsamongdiversestakeholdersFinelybalancedbetweenspecificity&generalityEffectiveMissionsCopyright2007PrenticeHallCh2-20Arousepositivefeelings&emotionsMotivatereaderstoactionGeneratefavorableimpressionofthefirmEffectiveMissionsCopyright2007PrenticeHallCh2-21ReflectfuturegrowthProvidecriteriaforstrategyselectionBasisforgenerating&evaluatingstrategicoptionsAredynamicinnatureEffectiveMissionsCopyright2007PrenticeHallCh2-22AnticipatescustomerneedsIdentifiescustomerneedsProvidesproduct/servicetosatisfyneedsMission&CustomerOrientationAnEffectiveMissionStatement--Copyright2007PrenticeHallCh2-23Affectsdevelopmentofvision&missionResponsibilitiesto–ConsumersEnvironmentalistsMinoritiesCommunitiesSocialPolicy&MissionManagerialphilosophyshapessocialpolicy--Copyright2007PrenticeHallCh2-24SocialPolicy&MissionSocialpolicyshouldbeintegratedinallstrategic-managementactivitiesMissionshouldconveythesocialresponsibilityofthefirmCopyright2007PrenticeHallCh2-25MissionStatements1.FannieMae2.Proctor&Gamble3.IntelCorporation4.St.PaulCompanies5.GreenMtn.Coffee6.Deere&Company2005RatedBestinSocialResponsibility7.AvonProducts,Inc.8.Hewlett-PackardCo.9.AgilentTechnologies10.Ecolab,Inc.11.ImationCorp12.IBMCopyright2007PrenticeHallCh2-262xaveragereturnonshareholder’sequityPositiverelationshiptocompanyperformance30%higherreturnoncertainfinancialmeasuresVision&MissionResearchresultsaremixed,however,firmswithformalmissionstatementsgenerallyseea:Copyright2007PrenticeHallCh2-27MissionElementsCustomersMarketsEmployeesPublicImageSelf-ConceptPhilosophySurvivalGrowthProfitProductsServicesTechnologyCopyright2007PrenticeHallCh2-28PepsiCoMissionPepsiCo’smissionistoincreasethevalueofourshareholders’investment.Wedothisthroughsalesgrowth,costcontrols,andwiseinvestmentresources.Webelieveourcommercialsuccessdependsuponofferingqualityandvaluetoourconsumersandcustomers;providingproductsthataresafe,wholesome,economicallyefficientandenvironmentallysound;andprovidingafairreturntoourinvestorswhileadheringtothehigheststandardsofintegrity.Copyright2007PrenticeHallCh2-29Ben&Jerry’sMissionBen&Jerry’smissionistomake,distributeandsellthefinestqualityall-naturalicecreamandrelatedproductsinawidevarietyofinnovativeflavorsmadefromVermontdairyproducts.TooperatetheCompanyonasoundfinancialbasisofprofitablegrowth,increasingvalueforourshareholders,andcreatingcareeropportunitiesandfinancialrewardsforouremployees.TooperatetheCompanyinawaythatactivelyrecognizesthecentralrolethatbusinessplaysinthestructureofsocietybyinitiatinginnovativewaystoimprovethequalityoflifeofabroadcommunity—local,nationalandinternational.Copyright2007PrenticeHallCh2-30MissionStatementEvaluationMatrixCOMPONENTSOrganizationCustomersProductsServicesMarketsConcernforSurvival,Growth,ProfitabilityTechnologyPepsiCoYesNoNoYesNoBen&Jerry'sNoYesYesYesNoCopyrigh