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lecturenote_Chapter 3

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19 views

lecturenote_Chapter 3

Uploaded by

Melkamu Amushe
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter Three:

The Business Mission


Chapter outline
 The importance of a clear mission
 The nature of business mission
 Components of a mission statement
INTRODUCTION

An organization’s mission is the purpose or reason for the organization’s existence. It tells what
the company is providing to society—either a service such as housecleaning or a product such as
automobiles. A well-conceived mission statement defines the fundamental, unique purpose that
sets a company apart from other firms of its type and identifies the scope or domain of the
company’s operations in terms of products (including services) offered and markets served.
 A mission statement focuses on current business activities --“who we are and
what we do”
 Current product and service offerings
 Customer needs being served
 Technological and business capabilities
Mission statement: Mission Statements reveal what an organization wants to be and whom it
wants to serve and how? Mission Statements are essential for effectively establishing objectives
and formulating strategies
An enduring statement of purpose
Distinguishes one firm from another in the same business
A declaration of a firm’s reason for existence
Mission Statements are also known as:
Creed statement
Statement of purpose
Statement of philosophy
Statement of business principles

Chapter 3-The Business Mission Page 1


Vision Statement:
A vision statement is sometimes called a picture of your company in the future but it’s so much
more than that. Your vision statement is your inspiration, the framework for all your strategic
planning. It is critically essential that management and executive agree on the basic vision, which
the organization endeavors to accomplish over a period of time
A lucid and clear vision lays down a foundation on which a sound mission statement can be
built.
A vision statement may apply to an entire company or to a single division of that company.
Whether for all or part of an organization, the vision statement answers the question, “Where do
we want to go?” Vision statement also answers the question “What do we want to become?”
What you are doing when creating a vision statement is articulating your dreams and hopes for
your business. It reminds you of what you are trying to build.
While a vision statement doesn’t tell you how you’re going to get there, it does set the direction
for your business planning. That’s why it’s important when crafting a vision statement to let your
imagination go and dare to dream – and why it’s important that a vision statement captures your
passion.
Unlike the mission statement, a vision statement is for you and the other members of your
company, not for your customers or clients.
3.1 The importance of a clear 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
3.2 The nature of business mission
Characteristics of good Mission Statements
Effective mission statements should be:
Broad in scope
Generate range of feasible strategic alternatives
Not excessively specific

Chapter 3-The Business Mission Page 2


Reconcile interests among diverse stakeholders
Finely balanced between specificity & generality
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

3.3 Components of a mission statement


Mission statements can and do vary in length, content, format, and specificity. Most practitioners
and academicians of strategic management consider an effective statement to exhibit nine
components. Because a mission statement is often the most visible and public part of the
strategic management process, it is important that it includes all of these essential components.
Components and corresponding questions that a mission statement should answer are given here.
Customer: 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?
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?

Chapter 3-The Business Mission Page 3

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