Welcome
to Management
Strategic

Lecture No. 3

M. Com Part-1 lectures G G College, Vasai

Strategic management
 Vision
A vision articulates the position
that an organization would like to
attain in the distant future. Vision
therefore is future aspirations
that lead to an inspiration to be
the best in one’s field of activity.
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 Vision
A Vision statement should answer the
basic question
What do we want to become?
Clear Vision provides the
foundation for developing a
comprehensive mission statement.
As many mangers as possible
should have input into developing
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Vision

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 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

 Distribute the draft among the managers

for modification for additions, deletions

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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

 Distribute the draft among the managers

for modification for additions, deletions

 Meet to revise the document and to give

to finalise the statement

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 Process of developing Vision
and Mission Statement
 Alternatively discussion groups can be formed
 Hire out consultants form out side who are

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

that firms with formalized mission

statement have twice the average return
on shareholders equity than those firms
without formalised mission statement

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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

mission statement have a 30 % higher

return on certain financial measures than
those without such statements

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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

involvement in developing vision and

mission statement can make a difference
in business success
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 Importance of Vision and
Mission statement
 According to King & Cleland the benefits
of a clearly worded vision and mission
statement gives the following benefit
 To ensure unanimity of purpose with in the
organisation
 To provide a basis or standard for allocation
organisational resources
 To establish a general tone or organizational climate

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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

among an organizational diverse stake holders

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Strategic Formulation

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Mission and Goals

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