Chapter 2

The Business Mission

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

Fred R. David
Prentice Hall

Ch. 2-1

Chapter Outline
What Do We Want to Become?

What Is Our Business?

Importance of Vision and Mission
Statements
Fred R. David
Prentice Hall

Ch. 2-2

Chapter Outline
Characteristics of a Mission Statement

Components of a Mission Statement

Writing and Evaluating Mission
Statements

Fred R. David
Prentice Hall

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.

Fred R. David
Prentice Hall

Ch. 2-4

Vision
Vision statement answers the question:

What do we want to become?

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Prentice Hall

Ch. 2-5

Vision
Clear vision
Provides foundation for comprehensive
mission statement

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Ch. 2-6

Vision & Mission

Vision statement developed first

Short preferably one sentence
Broad management involvement

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Prentice Hall

Ch. 2-7

Mission Statements
Recent Data indicate that:
90% of all companies have used a mission
statement sometime in the previous five
years.

Fred R. David
Prentice Hall

Ch. 2-8

Mission Statements
Mission statement answers the question:

What is our business?

Fred R. David
Prentice Hall

Ch. 2-9

Mission Statements
Mission Statement:
Enduring statement of purpose
Distinguishes one organization from
another in similar enterprises
Declaration of an organizations reason for
being
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Prentice Hall

Ch. 2-10

Mission Statements
Mission Statements also referred to as:
Creed statement
Statement of purpose
Statement of philosophy
Statement of business principles

Fred R. David
Prentice Hall

Ch. 2-11

Mission Statements
Mission Statements
Reveal what an organization wants to be
and whom it wants to serve

Fred R. David
Prentice Hall

Ch. 2-12

Mission Statements
Mission Statements
Essential for effectively establishing
objectives and formulating strategies

Fred R. David
Prentice Hall

Ch. 2-13

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

Fred R. David
Prentice Hall

Ch. 2-14

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
Fred R. David
Prentice Hall

Ch. 2-15

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

Fred R. David
Prentice Hall

Ch. 2-16

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
Fred R. David
Prentice Hall

Ch. 2-17

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

Fred R. David
Prentice Hall

Ch. 2-18

Mission Characteristics
Effective mission statements:
Reflect judgments re: future growth
Provide criteria for selecting strategies
Basis for generating & screening strategic
options
Are dynamic in orientation
Fred R. David
Prentice Hall

Ch. 2-19

Customer Orientation
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
Fred R. David
Prentice Hall

Ch. 2-20

Customer Orientation
A good mission statement reflects the
anticipations of customers.

Identify customer needs

Provide product/service to satisfy needs

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Prentice Hall

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
Fred R. David
Prentice Hall

Ch. 2-22

Social Policy & Mission

Social policy should be integrated in all

strategic-management activities.

Mission statement is an effective

instrument for conveying the social
responsibility of the firm.

Fred R. David
Prentice Hall

Ch. 2-23

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.
Fred R. David
Prentice Hall

Ch. 2-24

Mission Components
1.
2.
3.
4.
5.
6.
7.
8.
9.

Customers
Products or services
Markets
Technology
Survival, growth, and profitability
Philosophy
Self-concept
Concern for public image
Concern for employees
Fred R. David
Prentice Hall

Ch. 2-25

Components of Mission
Components of mission and corresponding
questions to be answered:

Customers:
Who are the firms customers?

Products or services:
What are the firm's major products or
services?
Fred R. David
Prentice Hall

Ch. 2-26

Components of Mission

Markets:
Geographically, where does the firm
compete?

Technology:
Is the firm technologically current?

Fred R. David
Prentice Hall

Ch. 2-27

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?
Fred R. David
Prentice Hall

Ch. 2-28

Components of Mission

Self-concept:
What is the firms 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?
Fred R. David
Prentice Hall

Ch. 2-29

PepsiCo Mission Statement

PepsiCos 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.
Fred R. David
Prentice Hall

Ch. 2-30

Ben & Jerrys Mission Statement

Ben & Jerrys 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 communitylocal, national and international.
Fred R. David
Prentice Hall

Ch. 2-31

Evaluation Matrix of Mission Statements

COMPONENTS

Customers

Products
Services

Markets

Concern for
Survival,
Growth,
Profitability

PepsiCo

Yes

No

No

Yes

No

Ben & Jerry's

No

Yes

Yes

Yes

No

Organization

Fred R. David
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Technology

Ch. 2-32

Evaluation Matrix of Mission Statements

COMPONENTS

Philosophy

SelfConcept

Concern for
Public Image

Concern for
Employees

PepsiCo

Yes

No

No

No

Ben & Jerry's

No

Yes

Yes

Yes

Organization

Fred R. David
Prentice Hall

Ch. 2-33