Chapter Two

The Business Vision and Mission

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 The vision statement

• A vision statement should answer the basic

question, “What do we want to become?”
• The vision statement should be short,
preferably one sentence, and as many
managers as possible should have input into
developing the statement.

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 The Mission Statement
• It answers the pivotal question “What is our
business?”
• A clear mission statement is essential for
effectively establishing objectives and
formulating strategies.

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The Process of Developing Vision and
Mission Statements
• A widely used approach to developing a vision
and mission statement is first to select several
articles about these statements and ask all
managers to read these as background
information.

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 Cont…
• Then ask managers themselves to prepare
vision and mission statement for the
organization.
• A facilitator, or committee of top managers,
should then merge these statements into a
single document and distribute the draft
statements to all managers.

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 Cont…
• A request for modifications, additions, and
deletions is needed next, along with a
meeting to revise the document.
• To the extent that all managers have input into
and support the final documents,
organizations can more easily obtain
managers’ support for other strategy
formulation, implementation, and evaluation
activities.
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 Cont…
• Thus, the process of developing a vision and
mission statement represents a great
opportunity for strategists to obtain needed
support from all managers in the firm.

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 Cont…
• During the process of developing vision and
mission statements, some organizations use
discussion groups of managers to develop
and modify existing statements.
• Some organizations hire an outside consultant
or facilitator to manage the process and help
draft the language.

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 Cont…
• Sometimes an outside person with expertise in
developing such statements, who has unbiased
views, can manage the process more effectively than
an internal group or committee of managers.
• Decisions on how best to communicate the vision
and mission to all managers, employees, and
external constituencies of an organization are
needed when the documents are in final form. Some
organizations even develop a videotape to explain
the statements, and how they were developed.
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 Benefits of Vision and Mission
Statements
Achieve clarity of purpose among all managers and
employees.
Provide a basis for all other strategic planning
activities, including the internal and external
assessment, establishing objectives, developing
strategies, choosing among alternative strategies,
devising policies, establishing organizational
structure, allocating resources, and evaluating
performance.
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 Cont…

Provide direction.

Provide a focal point for all stakeholders of the

firm.
Resolve divergent views among managers.

 Promote a sense of shared expectations

among all managers and employees.
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 Cont…
 Project a sense of worth and intent to all stakeholders.

 Project an organized, motivated organization worthy of

support.
 Achieve higher organizational performance.

 Achieve synergy among all managers and employees.

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 Cont…
To facilitate the translation of objectives into a work
structure involving the assignment of tasks to
responsible elements within the organization.
 To specify organizational purposes and then to
translate these purposes into objectives in such a
way that cost, time, and performance parameters can
be assessed and controlled.
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 Characteristics of a Mission
Statement
A Declaration of Attitude

• A mission statement is more than a statement

of specific details; it is a declaration of attitude
and outlook. It usually is broad in scope for at
least two major reasons.

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 Cont…

A Customer Orientation
• A good mission statement describes an
organization’s purpose, customers, products
or services, markets, philosophy, and basic
technology.

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 Mission Statement Components
Customers-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?
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 Cont…
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?
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 SAMPLE VISION STATEMENTS
Vision and Mission of Development Bank of
Ethiopia
• Vision: To be a World Class
Development Bank that Help to Achieve
Ethiopia’s Economic Transformation
Vision by 2030.

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 CONT….

Mission: The Development Bank of Ethiopia is a

specialized financial institution established to
promote the national development agenda
through development finance and close technical
support to viable projects from the priority areas
of the government by mobilizing fund from
domestic and foreign sources while ensuring its
sustainability. The Bank earnestly believes that
these highly valued objectives can best be served
through continuous capacity building, customer
focus and concern to the wider environment.
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 Class activity
• Make a group of three and develop a sample
vision and mission statement for any
company you chose. Your mission statement
should include the nine characteristics
summarized above.

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 Setting Goals

• Setting goals is done in light of vision and mission

statements of the organisation.
• Goals are general statements of what you want to
achieve.
• So they need to be integrated with your vision
and mission.
• Goals specify the end result the organisation
desires to achieve in terms of its programs or the
organisation as a whole.
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 Examples of Company Goals:

• To improve profitability
• To increase efficiency
• To improve employee training
• To capture a bigger market share
• To provide better customer service
• To reduce carbon emissions

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 A goal should meet the following criteria
• Suitable: Does it fit with the vision and mission?
• Acceptable: Does it fit with the values of the company
and the employees?
• Understandable: Is it stated simply and easy to
understand?
• Flexible: Can it be adapted and changed as needed?
• Make sure the goals are focused on the important
properties of the business.
• Be careful not to set too many goals.
• Also, design your goals so that they don‟t contradict
and interfere with each other. 23
 Establishing Objectives

• Objectives are specific, quantifiable, time-sensitive

statements of what is going to be achieved and
when it will be achieved.
• They are milestones along the path of achieving
your goals.
• Objectives are statements of the results to be
achieved in order to realize the accomplishment of
the goal.
• In order to be functional, objectives should be
crafted in a SMART way.
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 See below for the SMART criteria:

• Specific – an objective should be stated in a clear

and unambiguous manner;
• Measurable – the objective should provide criteria
as a basis of measuring success;
• Achievable – in light of the circumstances facing the
SAI, the objective should be realistic;
• Relevant – objectives should matter to those
responsible for accomplishing them;
• Time bound – an objective should set specific and
realistic time frames and target dates.
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 Examples of company objectives are

• To earn at least a 20 percent after-tax rate of

return on our net investment during the next
fiscal year
• To increase market share by 10 percent over the
next three years.
• To lower operating costs by 15 percent over the
next two years by improving the efficiency of the
manufacturing process.
• To reduce the call-back time of customers
inquiries and questions to no more than 4 hours.
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 Values
• Values are those beliefs and principles that the
organisation stands by.
• Typically, organisations operate by four to six core
values, which are of utmost importance to how
the organisation carries out its operations.
• It represents the institutional philosophy and the
support to the cultural organization.

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 Basis for Values:
• Orientation & commitment to customers
• Sustainability
• Interest in the people
• Social responsibility
• Integrity
• Team work
• Respect to people

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 Benefits of Values

• Organizational values help each person establish

priorities in their daily work life.
• Values guide every decision that is made once the
organization
• Organizational goals are grounded in the identified
values.
• Adoption of the values and the behaviors that result is
recognized in regular performance feedback.
• People hire and promote individuals whose outlook
and actions are congruent with the values. 29
Values of DBE
•Commitment to mission
•Customer focus
•Integrity
•Team work
•High value to employees
•Learning organization
•Concern to the environment

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End of second chapter!
Thank you!

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