Wednesday, March 10, 2010
Vision versus Mission
A mission statement answers the question “what is our business”
The vision statement answers the question “What do we want to become”
Vision is” a possible and desirable future state of an organization” that includes specific goals whereas mission is more associated with behavior and the present.
When employees and managers together shape or fashion the vision and mission statements for a firm, the resultant documents can reflect the personal visions that managers and employee have in their hearts and minds about their future.
Shared vision creates a commonality of interests that can lift workers out of monotony of daily work and put them into a new world of opportunity and challenge.
The Process of Developing a Mission Statement:
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;
1. Select several articles about mission statement and send them to all managers to read these as background information.
2. Ask managers themselves to prepare a mission statement for the organization.
3. A facilitator or committee of top managers should merge these statements into a single document and then distribute this draft mission statement to all managers.
4. Request for modifications, additions and deletions.
5. Meeting is hold to revise the document.
• During the process of developing a mission statement, some organizations use groups of managers to develop and modify the mission statements.
• Some Organizations hire an outside consultant or facilitator to manage the process and help draft the language.
Importance of Vision and Mission Statements:
Research has found:
1. Firms with formalized mission statement have twice the average return on shareholder’s equity that those firms without ` a formalized mission statement have. ( Rarick and Vitton)
2. Found a positive relationship between mission statements and organizational performance. ( Bart and Baetz).
3. Business Week reports that firms using mission statements have a 30 percent higher return on certain financial measures than those without such statements.
4. Some studies have found that having a mission statement does not directly contribute positively to financial performance.
Developing a mission statement is important for the following reasons:
1. To ensure unanimity of purpose within the organization.
2. To provide a basis or standard for allocating organizational resources
3. To serve as a focal point for individuals to identify purpose and direction, and to deter those who can not from participating further in organizational activities.
4. To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization.
Characteristics of a Mission Statement:
1. A Declaration of Attitude
• A mission statement is more than a statement of specific details; it is a declaration of attitude and outlook.
• A mission statement is broad in scope for two reasons:
A good mission statement allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity.
A mission statement needs to be broad to effectively reconcile among and appeal to an organization’s diverse stakeholders.
2. A Customer Orientation
• A good mission statement reflects the anticipation of customers. Rather than developing a product and then trying to find a market, the operating philosophy of organizations should be to identify customer’s needs and then provide a product or service to fulfill those needs.
• Good mission statements should identify the utility of a firms product to its customers. For instance:
i. Do not offer clothes. Offer attractive look.
ii. Do not offer shoes. Offer comfort for feet and pleasure of walking.
iii. Do not offer books. Offer hours of pleasure and benefit of knowledge.
3. A Declaration of Social Policy
• The term social policy embraces managerial philosophy and thinking at the highest level of an organization for this reason social policy affects the development of a business mission statement.
• The impact of society on business and vice versa is becoming more and more pronounced each year.
• Social policies directly affect a firm’s customers, products and services, markets, technology, profitability, self concept and image.
• An organization’s social policy should be integrated into all strategic management activities, including the development of a mission statement.
Components of a Mission Statement:
Because a mission statement is the most visible and Public of strategic management process, it is important that it includes all these essential components.
1. Customers: who are the firm’s customers?
2. Products and services: what are the firm’s major products and services?
3. Markets: geographically where does the firm compete.
4. Technology: is the firm technologically current?
5. Concerns for survival, growth, and profitability: is the firm committed to growth and financial soundness?
6. Philosophy: what are the basic beliefs, values, aspirations and ethical priorities of the firm?
7. Self-concept: what is the firm’s distinctive competence or major competitive advantage?
8. Concern for public image: is the firm responsive to social, community and environmental concerns?
9. Concerns for employees: are the employees the valuable assets of the firm?
Example of the Nine Essential Components of a Mission Statement:
We believe our first responsibility is to the doctors, nurses, patients, mothers, and all others who use our products and services (Johnson & Johnson)
2. Product or Services
AMAX’s principal are molybdenum, coal, iron ore, copper, lead, zinc, petroleum and natural gas, potash, phosphates, nickel, tungsten, silver, gold and magnesium. ( AMAX Engineering Company)
Our emphasis is on North America Market, although global opportunities will be explored. ( Blockway)
We will continually strive to meet the preferences of adult smokers by developing technologies that have the potential to reduce the health risks associated with smoking. ( RJ Reynolds)
5. Concern for survival, growth and profitability
In this respect, the company will conduct its operations prudently and will provide the profits and growth which will assure Hoover’s ultimate Success. (Hoover University)
Our world-class leadership is dedicated to a management philosophy that holds people above profit. ( Mary Kay Cosmetics)
Crown Zellerbach is committed to leapfrogging on going competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of its employees. ( Crown Zellerbach)
8. Concern for Public Image
To share the world’s obligation for the protection of environment. ( Pfizer)
9. Concern for Employees
To compensate its employees with remuneration and fringe benefits competitive with other employment opportunities in its geographical area and commensurate with their contributions toward efficient corporate operations. ( Public Service Electric & Gas Company)