Welcome To: Strategic Management
Welcome To: Strategic Management
Welcome
to Management
Strategic
Lecture No. 3
Strategic management
Strategic management
Pepsi Co
“Company’s responsibility is
to continuously improve all
aspects of the world in which
we operate-environment,
social, economic-creating a
better tomorrow than today
”
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Dell
“To create a culture
where environmental
excellence is second in
nature ”
It is too vague it should reveal
computer business in some manner the
word environment is generally used to
refer to natural environment so is
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Proctor &
Gamble
“to be, and be
recognised as, the best
consumer product
company in the world ”
It is too vague and readability is not
that good
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Mission and Goals
Mission
Sets out why the organization
exists and what it should be doing.
Major goals
Specify what the organization hopes
to fulfill in the medium to long term.
Secondary goals
Are objectives to be attained that lead to
superior performance.
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Mission
Mission Statement
A mission statement is an organization's
vision translated into written form. It
makes concrete the leader's view of the
direction and purpose of the organization.
For many corporate leaders it is a vital
element in any attempt to motivate
employees and to give them a sense of
priorities.
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Mission
A mission statement should be a short and
concise statement of goals and priorities. In
turn, goals are specific objectives that
relate to specific time periods and are
stated in terms of facts. The primary goal of
any business is to increase stakeholder
value. The most important stakeholders are
shareholders who own the business,
employees who work for the business, and
clients or customers who purchase products
and/or services from the business.
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Mission
Mission statement is a declaration of an organisation’s
reason for being
It reveals what an organisation wants to be and whom it wants to
serve
All organization has a reason for being
A clear mission is required for effectively establishing objectives and
formulating strategies
It is called a creed statement
A statement of purpose
A statement of philosophy
A statement of belief
A statement of business principles
A statement defining our business
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Key Terms
Vision Statement –
What do we want to become?
Mission Statement –
What is our business?
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Mission
Some develop Mission statements simply
because it is a fashion
Firm that develop systematically revisit
their vision and mission statement treat
them as a living document
Considered to be the integral part of firms
culture realise great benefit
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Mission
Johnson & Johnson managers meet
regularly with employees to review,
reword and reaffirm the firm’s vision and
mission
The entire workforce recognise the value
that top management places on this
exercise and these employees respond
accordingly
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Vision Vs Mission
Companies develop both vision and mission
statement
Mission answers what is our Business?
Vision answers the questions what do we want
to become
Argue – Profit not vision and mission motivates
employees see it as profit is something that we earn and
management then uses it and distribute as dividend, this
undesired and disturbing attitude is not healthy
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Vision Vs Mission
Thus both profit and vision are needed to
effectively motivate a workforce
When employees and managers together shape
or fashion the vision and mission statement it
reflects their own desires and visions
Shared vision creates a commonality of interest
This takes the workers out of the monotony of daily
work
It takes their attention to opportunities and
challenges
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Process of developing Vision
and Mission Statement
Involve as many as managers as possible
Through involvement people become committed
to the organisation
Select several articles about vision & mission
Circulate these among mangers for reading and
for developing background information
Request them to prepare a vision statement and
mission statement
A team or a facilitator to collect these statements
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Process of developing Vision
and Mission Statement
A team or a facilitator to collect these
statements and compile it
Form a single statement
Strategic management
Process of developing Vision
and Mission Statement
A team or a facilitator to collect these
statements and compile it
Form a single statement
experts
These are experts in developing such statement
They will also be unbiased can manage the process
more effectively
Some develop a video statement to explain it and
how they were developed
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Importance of Vision and
Mission statement
Different studies proved differently on the
importance of vision and mission statement
Rarick and Vitton in their studies found
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Importance of Vision and
Mission statement
Bart and Baetz found a positive
relationship between mission statements
and organizational performance
Business week reports that firm using
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Importance of Vision and
Mission statement
Some studies have found that having a
mission statement does not directly
contribute positively to financial
performance
The involvement of manger and employee
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Importance of Vision and
Mission statement
To serve as a focal point for individuals to identify
with the institutions purpose and direction
To facilitate the translation of objectives into a work
structure
To specify the organisational purpose and then to
translate these purposes into objectives in such a
way that the cost, time and performance
parameters can be assessed and controlled
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Characteristics of a mission
Statement
It more than a statement of specific details; it
is a declaration of attitude and outlook
It is broad in Scope
It allows the generation and consideration of a range of
feasible alternative objectives and strategies without
unduly stifling management creativity
need to be broad to effectively reconcile differences
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Strategic Formulation
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Mission and Goals
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