COMPREHENSIVE STRATEGIC MODEL:Mission statement, Narrow Mission:

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Strategic Management MGT603

Lesson 5

COMPREHENSIVE STRATEGIC MODEL

Objective:

The extent of manager and employee involvement in developing vision and mission statements can make a

difference in business success. This lecture provides guidelines for developing these important documents.

Mission statement:

An enduring statement of purpose

Distinguishes one firm from another in the same business

A declaration of a firm's reason for existence

Mission is the purpose of or a reason for organization existence. Mission is a well convincible statement

included fundamental and unique purpose which makes it different from other organization. It identifies

scope of it operation in terms of product offered and market served. Mission also means what we are and

what we do. A survey in a North America and in Europeans corporation reveal that 60% to 75% have

written or formal and remaining has no written or formal mission.

Illustration:

Nest vision computer college mission statement reveals:-

"We are dealing in all activities which includes in IT, definition".

Qarshi Laborites Mission Statement,

"Production of herbal product is our mission".

Mission Statements are also known as:

Creed statement

Statement of purpose

Statement of philosophy

Statement of business principles

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.

Mission is divided into two categories:

Narrow Mission

Broad Mission

Narrow Mission:

Narrow mission also identifies our mission but it restrict in terms of:

1. Product and services offered

2. Technology used

3. Market served

4. Opportunity of growth

Broad Mission:

Broad mission wider our mission values in terms of product and services, offered, market served,

technology used and opportunity of growth. But main flow of this mission that if creates confusion among

employee due to its wider sense.

Illustration:

For example two different firms A & B. A deals in Rail Roads and B deals in Transportation i.e. we can say

A co. has narrow mission and B co. has a wider mission.

Strategic Management MGT603

Most companies are now getting used to the idea of using mission statements.

Small, medium and large firms in Pakistan are also realizing the need and adopting mission statements.

Some example of Mission statement:

1. "The Bellevue Hospital, with respect, compassion, integrity, and courage, honors the individuality and

confidentiality of our patients, employees, and community, and is progressive in anticipating and

providing future health care services."

2. The Mission of USGS is to serve the Nation by providing reliable scientific information to

Describe and understand the Earth;

Minimize loss of life and property from natural disasters;

Manage water, biological, energy, and mineral resources; and enhance and protect our quality

of life

3. "It is the California Energy Commission's mission to assess, advocate, and act through improve

energy systems that promote a strong economy and a healthy environment."

Characteristics of good Mission Statements:

Mission statements can and do vary in length, contend, format, and specificity. Most practitioners and

academicians of strategic management consider an effective statement to exhibit nine characteristics or

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.

Effective mission statements should be:

Broad in scope

Generate range of feasible strategic alternatives

Not excessively specific

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

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?

Strategic Management MGT603

Vision Statement:

"Vision is the art of seeing things invisible"

.. . . . Jonathan Swift

"The very essence of leadership is that you have vision. You can't blow an uncertain trumpet"

Theodore Hesburgh

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.

When writing a vision statement, your mission statement and your core competencies can be a valuable

starting point for articulating your values. Be sure when you're creating one not to fall into the trap of only

thinking ahead a year or two. Once you have one, your vision statement will have a huge influence on

decision making and the way you allocate resources.

A vision usually precedes the mission statement

It is usually short, concise and preferably limited to one sentence

Organization-wide management involvement is advisable

Some examples of Vision statements:

1. "The Bellevue Hospital is the LEADER in providing resources necessary to realize the community's

highest level of health throughout life".

. . . . The Bellevue Hospital

2. "To be the first choice in the printed communications business, the first choice is the best choice, and

being the best is what Atlanta Web pledges to work hard at being- every day!"

. . . . Atlanta Web Printers, Inc.

3. "It is the vision of the California Energy Commission for Californians to have energy choices that are

affordable, reliable, diverse, safe, and environmentally acceptable".

. . . . California Energy Commission

4. Our vision is helping individuals and organizations discover and develop their God given potentials to

achieve the ultimate Success".

. . . . University of Management & Technology, Lahore

MISSION V/S VISION

Many organizations develop both vision and mission statements

Profit and vision are necessary to effectively motivate a workforce

Shared vision creates a commonality of interest

Some organization developed both mission statement and vision statement. Mission statement explains the

current and present position and activities of a firm whereas mission statement explains the future objective

and goals of the company. Mission statement answers the questions what is our business? The vision

statement answer the question what do we want to become?

Strategic Management MGT603

AMOCO Corporation

Amoco is a worldwide integrated petroleum and chemical company. We

find and develop petroleum resources and provide qualify products and services

Mission Statement:

for our customers. We conduct our business responsibly to achieve a superior

financial return balanced with our long-term growth, benefiting shareholders

and fulfilling our commitment to the community and the environment.

Amoco will be as global business enterprise, recognized throughout the

world as preeminent by employees, customer, competitors, investors and the

Vision Statement:

public. We will be the standard by which other businesses measure their

performance. Our hallmarks will be the innovation, initiative and teamwork of

our people and our ability to anticipate and effectively respond to change and to

create opportunity.

ADAMJEE Insurance Company Limited

Being the leading insurance company Pakistan and second best in Asia,

our aim is to be a significant participant in developing Pakistan's image by

Mission Statement:

providing maximum insurance protection at the most competitive price in a

highly efficient manner for industrial and economic growth.

To remain in the leading insurance company of Pakistan and excelling it's every

aspect of business and in delivering its obligations as a good corporate citizen to

Vision Statement:

its clients, employees and shareholders, public and to the country.

Many organizations develop both a mission statement and a vision statement. Whereas the mission

statement answers the question, what is our business? the vision statement answers the question, What do we

want to become? Many organizations have both a mission and vision statement.

It can be argued that profit, not mission or vision is the primary corporate motivator. But profit alone is not

enough to motivate people. Profit is perceived negatively by some employees in companies. Employees may

see profit as something that they earn and management then uses and even gives away--to shareholders.

Although this perception is undesired and disturbing to management, it clearly indicates that both profit and

vision are needed to effectively motivate a workforce.

When employees and managers together shape or fashion the vision and mission for a firm, the resultant

documents can reflect the personal visions that managers and employees have in their hearts and minds

about their own futures. Shared vision creates a commonality of interests that can lift workers out of the

monotony of daily work and put them into a new world of opportunity and challenge.

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The Process of Developing a Mission Statement

A clear mission is needed before alternative strategies can be formulated and implemented.

Mission is important to have as broad a range of participation as possible among managers in

developing the mission.

As indicated in the strategic-management model, a clear mission statement is needed before alternative

strategies can be formulated and implemented. It is important to involve as many managers as possible in

the process of developing a mission statement, because through involvement, people become committed to

an organization.

A widely used approach to developing a mission statement is first to select several articles about mission

statements and ask all managers to read these as background information. Then ask managers themselves to

prepare a mission statement for the organization. A facilitator, or committee of top managers, then should

merge these statements into a single document and distribute this draft mission statement to all managers. 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 mission statement

document, organizations can more easily obtain managers' support for other strategy formulation,

implementation, and evaluation activities. Thus the process of developing a mission statement represents a

great opportunity for strategists to obtain needed support from all managers in the firm.

During the process of developing a mission statement, some organizations use discussion groups of

managers to develop and modify the mission statement. Some organizations hire an outside consultant or

facilitator to manage the process and help draft the language. Sometimes an outside person with expertise in

developing mission statements and unbiased views can manage the process more effectively than an internal

group or committee of managers. Decisions on how best to communicate the mission to all managers,

employees, and external constituencies of an organization are needed when the document is in final form.

Some organizations even develop a videotape to explain the mission statement and how it was developed.

Importance of Vision and Mission Statements

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

Most companies are now getting used to the idea of using mission statements.

Small, medium and large firms in Pakistan are also realizing the need and adopting mission statements.

The importance of vision and mission statements to effective strategic management is well documented in

the literature, although research results are mixed.

A Resolution of Divergent Views

Developing a comprehensive mission statement is important because divergent views among managers can

be revealed and resolved through the process. The question, What is our business?, can create controversy.

Raising the question often reveals differences among strategists in the organization. Individuals who have

worked together for a long time and who think they know each other suddenly may realize that they are in

fundamental disagreement. For example, in a college or university, divergent views regarding the relative

importance of teaching, research, and service often are expressed during the mission statement

development process. Negotiation, compromise, and eventual agreement on important issues are needed

before focusing on more specific strategy formulation activities.

"What is our mission?" is a genuine decision; and a genuine decision must be based on divergent views to

have a chance to be a right and effective decision. Developing a business mission is always a choice between

alternatives, each of which rests on different assumptions regarding the reality of the business and its

environment. It is always a high-risk decision. A change in mission always leads to changes in objectives,

strategies, organization, and behavior. The mission decision is far too important to be made by acclamation.

Developing a business mission is a big step toward management effectiveness. Hidden or half-understood

disagreements on the definition of a business mission underlie many of the personality problems,

communication problems, and irritations that tend to divide a top-management group. Establishing a

Strategic Management MGT603

mission should never be made on plausibility alone, should never be made fast, and should never be made

painlessly.

In multidivisional organizations, strategists should ensure that divisional units perform strategic-

management tasks, including the development of a statement of vision and mission. Each division should

involve its own managers and employees in developing a vision and mission statement consistent with and

supportive of the corporative mission.

An organization that fails to develop a vision statement as well as a comprehensive and inspiring mission

statement loses the opportunity to present itself favorably to existing and potential stakeholders. All

organizations need customers, employees, and managers, and most firms need creditors, suppliers, and

distributors. The vision and mission statements are effective vehicles for communicating with important

internal and external stakeholders. The principal value of these statements as tools of strategic management

is derived from their specification of the ultimate aims of a firm:

They provide managers with a unity of direction that transcends individual, parochial, and transitory needs.

They promote a sense of shared expectations among all levels and generations of employees. They

consolidate values over time and across individuals and interest groups. They project a sense of worth and

intent that can be identified and assimilated by company outsiders. Finally, they affirm the company's

commitment to responsible action, which is symbiotic with its need to preserve and protect the essential

claims of insiders for sustained survival, growth, and profitability of the firm.

Examples of Mission Statements of some Organizations:

1. Pfizer, Inc. (www.pfizer.com/main.html)

Pfzer, Inc. is a research based global health care company. Our principal mission is to apply

scientific knowledge to help people around the world enjoy longer, healthier and more productive lives. The

company has four business segments: health care, consumer health care, food science and animal health. We

manufacture in 39 countries and our products are available worldwide.

2. Chase Manhattan Corporation (www.chase.com)

We provide financial services that enhance the well being and success of individuals, industries,

communities and countries around the world.

Through our shared commitment to those we serve, we will be the best financial services company

in the world. Customers will choose us first because we deliver the highest quality service and performance.

People will be proud and eager to work here. Investors will bury our stock as a superior long-term

investment. To be the best for our customers, we are team players who show respect of our colleagues and

commit to the highest standards of quality and professionalism, Customer focus, Respect for each other,

Teamwork, Quality and professionalism.

3. Food Lion, Inc. (www.foodlion.com)

The Food Lion team will work hard to use our talents and resourcefulness to satisfy every customer by

providing Extra Low Prices on a wide variety of quality products in a clean, convenient and friendly

environment.

4. Apple Computer (www.apple.com)

It is Apple's mission to help transform the way customers work, learn and communicate by providing

exceptional personal computing products and innovative customer services.

We will pioneer new directions and approaches, finding innovative ways to use computing technology to

extend the bounds of human potential.

Apple will make a difference: our products, services and insights will help people around the world shape

the ways business and education will be done in the 21st century.

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5. AT & T (www.att.com)

We are dedicated to being the world's best at bringing people together giving them easy access to each other

and to the infomrait5on and services they want anytime, anywhere.

6. Corning, Inc. (www.corning.com)

Our purpose is to deliver superior, long range economic benefits to our customers, our employees and our

shareholder and to the communities in which we operate. We accomplish this by living our corporate

values.

7. Nicholls State University (College of Business)

The principal mission of the College of Business is to prepare students to participate in society and the

work force as educated individuals able to compete in a dynamic global economy. In order to enrich the

learning process, the College also contributes to scholarship through applied research and instructional

development. In addition to providing support to the employer community through the development of

marketable skills in potential employees, the College also enhances the competitive capabilities of regional

businesses by providing continuing education courses and consulting services through the Small Business

Development Center (SBDC) and the individual efforts of faculty. The faculty advances the welfare of the

University, the community and academic and professional organizations through professional interactions.

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