Mission statement organization's vision translated into written form
|✅ Paper Type: Free Essay||✅ Subject: Business|
|✅ Wordcount: 5398 words||✅ Published: 1st Jan 2015|
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. (1)
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.
A mission statement is a brief description of a company’s fundamental purpose. A mission statement answers the question, “Why do we exist?” (1)
The mission statement articulates the company’s purpose both for those in the organization and for the public.
For instance, the mission statement of Canadian Tire reads (in part): “Canadian Tire is a growing network of interrelated businesses… Canadian Tire continuously strives to meet the needs of its customers for total value by offering a unique package of location, price, service and assortment.”
The mission statement of Rivercorp, business development consultants in Campbell River, B.C., is: “To provide one stop progressive economic development services through partnerships on behalf of shareholders and the community.”
As you see from these two mission statement samples, mission statements are as varied as the companies they describe. However, all mission statements will “broadly describe an organization’s present capabilities, customer focus, activities, and business makeup” (5).
The difference between a mission statement and a Strategic Intent is that a mission statement focuses on a company’s present state while a Strategic Intent focuses on a company’s future.
Every business should have a mission statement, both as a way of ensuring that everyone in the organization is “on the same page” and to serve as a baseline for effective business planning
Mission statements often contain the following
Purpose and aim of the organization
The organization’s primary stakeholders: clients, stockholders, congregation, etc.
Responsibilities of the organization toward these stakeholders
Products and services offered
So, when you are preparing your Mission Statement remember to make it clear and succinct, incorporating socially meaningful and measurable criteria and consider approaching it from a grand scale. As you create your Mission Statement consider including some or all of the following concepts.
The moral/ethical position of the enterprise
The desired public image
The key strategic influence for the business
A description of the target market
A description of the products/services
The geographic domain
Expectations of growth and profitability
A Strategic Intent is sometimes called a picture of your company in the future but it’s so much more than that. Your Strategic Intent is your inspiration, the framework for all your strategic planning.
A Strategic Intent may apply to an entire company or to a single division of that company. Whether for all or part of an organization, the Strategic Intent answers the question, “Where do we want to go?”
What you are doing when creating a Strategic Intent is articulating your dreams and hopes for your business. It reminds you of what you are trying to build.
While a Strategic Intent doesn’t tell you how you’re going to get there, it does set the direction for your business planning. (For more on the role of your Strategic Intent in business planning, That’s why it’s important when crafting a Strategic Intent to let your imagination go and dare to dream – and why it’s important that a Strategic Intent captures your passion.
Unlike the mission statement, a Strategic Intent is for you and the other members of your company, not for your customers or clients.
Corporate vision is a short, succinct, and inspiring statement of what the organization intends to become and to achieve at some point in the future, often stated in competitive terms. Vision refers to the category of intentions that are broad, all-inclusive and forward-thinking. It is the image that a business must have of its goals before it sets out to reach them. It describes aspirations for the future, without specifying the means that will be used to achieve those desired ends.
Warren Bennis, a noted writer on leadership, says: “To choose a direction, an executive must have developed a mental image of the possible and desirable future state of the organization. This image, which we call a vision, may be as vague as a dream or as precise as a goal or a mission statement.”
A strategic intent is a company’s vision of what it wants to achieve in the long term. It must convey a significant stretch for your company, a sense of direction, discovery, and opportunity that can communicated as worthwhile to all employees. It should not focus so much on today’s problems, which are normally dealt with by company visions and missions, but rather on tomorrow’s opportunities.
“To achieve great things, you need ambitious visions. And it does not matter that vision cannot be laid out in details. It is the direction that counts.”
Its significance on the Organization
â€¢ Visions incorporate goals for the future: but whose goals? Make sure the goals set out by your organization are shared by the community you serve.
â€¢ Visions are often value-laden statements. Values should be broad and inclusive to incorporate as many people and perspectives as possible.
â€¢ Visions should be optimistic and inspiring: to you, organization staff, and the community you serve. “We believe in the equality of all people, regardless of race, class, nationality, gender, or sexual orientation.” (2)
In short, the mission guides the organization in its daily work, and the vision inspires the organization and the community to never give up on its future goals.
Strategic Business Management and Planning
The Strategic Position
Strategy in Action
Figure 3.0 –
The Exploring Corporate Strategy model (4)
Understanding the strategic position is concerned with identifying the impact on strategy of the external environment, an organization’s strategic capability and the expectations and influence of stakeholders. The sort of questions this raises are central to future strategies.
The Environment – Environment plays an important role in building up the strategies and how it affects the organisation strategies and goals looking out for the opportunities and threats from the outer world. Therefore it is very important to evaluate the environmental impacts on the organization.
The capabilities – Capabilities depends upon the resources and competences within the organization. One way of thinking about the strategic capability of an organization is to consider its strengths and weaknesses. Look for the core competences and USP’s which the competitors will find difficult to imitate.
Purpose – The major influences of stakeholder expectations is organizations purposes. Purpose is summarized in an organisation’s vision, mission and values. This is important since it clarifies who should the organization serve and how should it work. this reflects the corporate social responsibilities and ethics.
Culture – These influences directly either on organizational, sectoral or national.
“Corporate Governance is concerned with the structures and systems of control by which managers are held accountable to those who have legitimate stake in an organization.” (4)
There are many other reason which has made its presence an important issue for the organization. Out of which the three main reasons are as follows;
The separation of ownership and management control which means that the organization works with hierarchy or within the chain of governance. This chain basically represents those groups that influence an organization through their involvement in either ownership or management of an organization.
Scandals by the corporate have increased a lot of public debate about different parties in the governance chain should interact and influence each other. Most notable here is the relationship between shareholders and the boards of businesses as well as relationship between government or public funding bodies and public sector organizations.
Increased accountability to wider Stakeholder interests has also come to be increasingly advocated; in particular the argument that corporations need to be more visibly accountable and responsive , not only to ‘owners’ and ‘managers’ in the governance chain but to wider social interest.
Social responsibility and ethics
Figure 4.0 – Influences on strategic purpose (4)
The governance chain explains completely the roles and relationships of different groups which are present in the governance of an organization. The chain is very simple to understand it is similar like a family tree. It has shareholders, family members, managers and a board. It is a large and publicly quoted organization with more investors layers as well.
Hence good corporate governance can be achieved only if it is an embedded part of corporate life: part of the DNA of the organisation, its internal processes and the way it makes information available externally.
In many countries most companies are run mostly for the benefit of the shareholders, the rightful owners. But there is another model, where companies are run for the benefit of other significant groupings as well – such as customers, the general public or employees. This is the stakeholder model.
Choosing a board for each of these models – or something in between – requires people with different backgrounds and outlooks. The following table compares the shareholder and stakeholder models:
Maximize shareholder value and look after shareholder interests
Look after all stakeholder interests, especially public
Seek profitability and efficiency
Look for survival, long term growth, and stability
Hard-nosed and commercial
Less concerned with profit than value for money
A Stakeholders mapping can be used appropriately to understand the stakeholders influence. Stakeholder mapping can define his expectations and power and helps in understanding political priorities. It emphasizes the importance of two issues:
Interest of the stakeholder group on organization’s purposes and choice of strategies
Power of stakeholders to actually do it
They are described in a quadrant of four different types based on level of interest and their power, as follows
Figure 5.0 – Stakeholder Mapping
Level of Interest
Non – Profit Organizations
A non-profit organization is an organization which does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals. Examples of NPOs include charities (i.e. charitable organizations), trade unions, and public arts organizations. Most governments and government agencies meet this definition, but in most countries they are considered a separate type of organization and not counted as NPOs. They are in most countries exempt from income and property taxation.
An organization is a social arrangement which pursues collective goals, controls its own performance, and has a boundary separating it from its environment. It is a business which has a primary goal of making profit and a proposed goal such as helping the environment.
Differences between Profit and Non-profit Organization
Ownership is the quantitative difference between for- and not-for-profit organizations. For-profit organizations can be privately owned and may re-distribute taxable wealth to employees and shareholders. By contrast, not-for-profit organizations do not have owners. They have controlling members or boards, but these people cannot sell their shares to others or personally benefit in any taxable way.
While they are able to earn a profit, more accurately called a surplus, such earnings must be retained by the organization for its self-preservation, expansion and future plans. Earnings may not benefit individuals or stake-holders. While some non-profit organizations put substantial funds into hiring and rewarding their internal corporate leadership, middle-management personnel and workers, others employ unpaid volunteers and even executives may work for no compensation. However, since the late 1980s there has been a growing consensus that nonprofits can achieve their corporate targets more effectively by using some of the same methods developed in for-profit enterprises. These include effective internal management, ensuring accountability for results, and monitoring the performance of different divisions or projects in order to better benefit from their capital and workers. Those require satisfied management and that, in turn, begins with the organization’s mission
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There are a variety of perspectives, models and approaches used in strategic planning. The way that a strategic plan is developed depends on the nature of the organization’s leadership, culture of the organization, complexity of the organization’s environment, size of the organization, expertise of planners, etc. For example, there are a variety of strategic planning models, including goals-based, issues-based, organic, scenario (some would assert that scenario planning is more of a technique than model), etc. Goals-based planning is probably the most common and starts with focus on the organization’s mission (and vision and/or values), goals to work toward the mission, strategies to achieve the goals, and action planning (who will do what and by when). Issues-based strategic planning often starts by examining issues facing the organization, strategies to address those issues and action plans. Organic strategic planning might start by articulating the organization’s vision and values, and then action plans to achieve the vision while adhering to those values. Some planners prefer a particular approach to planning, eg, appreciative inquiry. Some plans are scoped to one year, many to three years, and some to five to ten years into the future. Some plans include only top-level information and no action plans. Some plans are five to eight pages long, while others can be considerably longer.
For-profit and nonprofit business plans have many similarities. For that reason, nonprofit personnel would benefit from reading the links in the section above, “For-Profit Business Planning”. Some of the terms are different, but in most cases they can readily be translated into words more commonly used in the nonprofit sector. For example, “balance sheet” is what nonprofit call a “statement of financial position”, “profit and loss statement” (or income statement) is essentially the same as a “statement of financial activities”, and so on.
One of the key difference between a for profit and a non profit plan is the marketing section. In a for profit business, the served customers are generally those who provide the revenues needed to cover expenses and continue operations. For a non profit, often the served constituents do not provide this sustaining funding, and it must be sought from a third party – donors. This means the marketing plan must describe both how the organization will communicate its services to its service target market and how it will communicate its need for funding to its funding target market. This means detailing these two separate marketing messages and two strategies for marketing.
Another key difference is the “non profit” part of the business plan. Financial plans for a non profit do not have to show net profit, and, if they do, there must be some explanation of what those retained earnings will be used for. They cannot be distributed as dividends, as the organization is technically owned by the public and not by the directors or board. However, profits can be accumulated for the purposes of creating an endowment or capital fund for future expenditures. An accountant should be consulted for any decisions of this nature.
International dimensions of strategic business management and planning
Going global is one of the key visions of most of the organizations. Choosing globalization increases the option for the organization’s range of products or services and how to manage across the borders. Through international strategy framework it becomes achievable in a better way. International strategy as the core theme, depends upon two things, the external environment and organizational capabilities. If you see the figure 6.0 it focuses more on internationalisation drivers and on the capabilities side it emphasises on international and national sources of advantage.
Figure 6.0 – International strategy framework
Sources of competitive advantage
Mode of entry
Similar customer needs
Transferable marketingInternationalisation Drivers
Figure 7.0 – Internalisation Drivers
Host Government Policies
Interdependence between countries
Competitors’ global strategies
Market globalization drivers
There is a general belief that several markets are converging around the world. There are several reasons for this. First, the convergence of Gross National Product (GNP) per capita in the developed world is leading to a convergence in markets sensitive to wealth and level of income such as passenger cars, television sets, and computers.
Second, there is evidence to suggest that in some industries, customers’ tastes, perceptions, and buying behaviours are converging, and that the world is moving towards a single global market that is basically Western and, more specifically, North American. In a landmark article titled ‘The globalization of markets’ Levitt (1983) predicted that globalization drivers such as new technology would lead to homogenization of consumer desires and needs across the world. He argued that this would happen because generally consumers would prefer standard products of high quality and low price to more customized but higher-priced products.
Third, in the quest to build a global brand and company image, multinational firms are increasingly favouring a global standardization of marketing and advertising efforts. This does not mean identical marketing and advertising campaigns, but the use of similar themes that send the same message across the world. Recent developments in broadcast media, particularly direct-broadcast satellite and international media, are making this more possible. CNN, for example, broadcasts standard adverts around the world.
Cost globalization drivers
Several key cost drivers may come into play in determining an industry globalization level. One key factor is global scale economies. That is, the costs of producing a particular product or service are often subject to economies or dis-economies of scale. Generally, economies of scale arise when a product or a process can be performed more cheaply at greater volume than at lesser volume. This is often the case when the product or service is standardized; hence it becomes hard for multinational firms to differentiate themselves, and cost becomes key in achieving and sustaining a competitive advantage. Producing different products for different countries leads to higher cost per unit. This is because multinational firms serving countries with separate products may not be able to reach the most economic scale of production for each country’s unique product. Multinational firms could reduce the cost by using common parts and components produced in different countries.
Another factor is sourcing efficiencies. Global sourcing efficiencies may push multinational firms towards a global strategy. The prices of key resources used in the production process have a strong impact on the cost of the product or service, the cost of inputs depends on the bargaining power of the firm with their suppliers. For example, large firms purchasing large volumes have more clout with their suppliers than their small rivals. Hewlett-Packard (HP) is a good example. In the past, country-level subsidiaries used to solicit bids for insurance coverage independently. Each subsidiary chose the local provider who bid less than the competition. However, HP now belongs to a global insurer-insured pool which provides rebates based on business volume.
In addition, as noted earlier, some countries provide a cost advantage because of low cost of raw material, low cost of labour, or low cost of transport because of location. Thus multinational firms locate their activities in different countries to benefit from these advantages.
Further, in sectors where transportation cost is low, closeness to customers is not important, and urgency to distribute the product is low, multinational firms tend to concentrate their production in large plants producing large-scale products. Finally, high cost of product development drives multinational firms to focus on core products that have universal appeal to control cost.
Government globalization drivers
Governments have different policies for different industries. While (as discussed above) the general trend is lower trade barriers and less regulation, for a few sectors trade barriers are prohibitive and highly regulated by governments.
In addition to trade barriers and regulations, technical standards are becoming similar around the world. For example, several countries have accepted new international accounting norms and standards. In Europe, the International Accounting Standards (IAS) are quickly becoming the norm. This will allow direct cross-border comparison of financial statements, and facilitate communication between subsidiaries and the centre. Companies like Nokia, the Allianz group, and Novartis are working to bring about a convergence of US accounting standards with IAS.
Because of tight interlinks between key world markets, intense competition across countries, and the continuous increase in the number of global competitors, multinational firms are adopting a ‘globally centred’ rather than ‘nationally centred’ strategy. According to George Yip, the increase in interactions between competitors from different countries requires a globally integrated strategy to monitor moves by competitors in different countries. He notes that by pursuing a global strategy, competitors create competitive interdependence among countries. This interdependence forces multinational firms to engage
in competitive battles and to subsidize attacks in different countries. Cross-subsidization is only possible if the multinational firm has a global strategy that monitors competitors centrally rather than on a country-by-country basis. Globalized competitors drive industries to adopt a global strategy. Yip noted that when major competitors, especially first movers, use a global strategy to introduce customers to global products, late movers adopt the same strategy so as to achieve economies of scale or scope and other benefits associated with adopting a global strategy. Last, the ability to transfer competitive advantage globally drives multinationals to adopt a global strategy. For example, IKEA succeeded in transferring its locally developed advantage to a global market. Conversely, sectors where the competitive advantage is ‘locally rooted’ and hard to transfer across countries, multinationals tend to adopt an international strategy rather than a global one. (8)
Strategic Management is a term which underlines the importance of managers with regards to the company strategy. Strategy needs to be defined by the people especially the managers who also implement them. Strategic Management involves a greater scope than that of any one area of operational management. It is characterised in way it makes easy for the managers to make decision and judgement based on the conceptualisation of difficult issues. Corporate strategy is defined as the identification of the purpose of the organization and the plans and actions to achieve that purpose. Corporate strategy consist of two main elements: corporate level strategy and business level strategy .See figure 7.0
At Corporate Level: All the decisions need to be taken over what business the company is in or should be in. The culture and leadership of the organization are also important at this broad general level. ” Corporate strategy is the pattern of major objectives, purpose or goals and essential policies or plans for achieving those goals, stated in such a way as to define what business the company is in or be in and the kind of company it is or be.” (9)
At Business Level: corporate strategy is more alarmed with the competing for customers, generating value from the resources and the underlying principle of the sustainable competitive advantages of those resources over rival companies.
Figure 8.0 –
The essence of corporate strategy
At the individual business level:
How do we complete successfully? What is our sustainable competitive advantage?
How can we innovate?
Who are our customers?
What value do we add?
At the general corporate level:
What business are we in?
What business we should be in?
What business our basic directions for the future?
What is our culture and leadership style?
What is our attitude to strategic change? What should it be?
‘ What is the purpose of the organization? And what are our strategies to achieve this?’
The three main areas of strategy
At both the levels of corporate strategy every organization has to manage its strategies in three main areas:
Organizations internal resources;
External environment within the area of organization operates;
Organizations ability to add value to its organizations process.
Resources of any organization includes human resource skills, investors and the capital. Organizations need to build a good strategies to optimise the use of the resources. In particular, it is essential to investigate the sustainable competitive advantage that will allow the organization to survive and prosper against competition.
Environment encompasses all the aspect external to the organization itself: not only the economic and political circumstances, which depends place to place but competitors, customers and suppliers, who may vary widely around the world, but also competitors, customers are particularly important here. Hence organizations therefore needs to develop corporate strategies that are best suited to their strengths and weakness in relation to the environment in which they operate.
Apart from environment and resources organizations still need to add value to the supplies brought into the organization. For long term survival, an organization take their supplies seriously and then deliver its output to its customers.
The main purpose of corporate strategy is to make the organization create and add vital values to make sure the organization adapts the changes and continue to add value in future.
Core areas of Corporate Strategy
There are three core areas of corporate strategy are strategic analysis, strategy development and strategy implementation.
Strategic analysis: The organization, its mission and objectives have to be examined and analysed. Corporate strategy provides value for the people involved in the organization, its stakeholders but it’s the managers who decide the objectives of the organization. They also analyse the resources and examine the objectives as well as the relationship with the environment.
Strategy development: A strategy options has to be developed and then the right has to be selected. To be successful, the strategy is build upon a particular skills of the organization and the special relationship that it has or can develop with the other outside suppliers, customers, distributors and government.
Strategy implementation: The selected options now has to be implemented and the organization will find many other difficulties in terms of motivation, power relationships, government negotiations, company acquisitions and many other matters.
Hierarchical Characteristics of Strategy
Strategy can be formulated on three different levels:
Business unit level
Functional or Operational level,
While strategy may be about competing and surviving as a rum, one can argue that products, not corporations compete, and products are developed by business units. The role or the corporation then is to manage its business units and products so that each is competitive and so that each continues to corporate purposes.
While the corporation must manage its portfolio of businesses to grow and survive, the success of a diversified firm depends upon its ability to manage each of its product lines, While there is no single competition to Textron, we can talk about the competitors and strategy of each of its business units. In the finance business segment, for example, the chief rivals ate major banks providing commercial financing. Many matagers consider the business level to be the proper focus for strategic planning.
Corporate Level Strategy
Corporate level strategy fundamentally is concerned with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of
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