LECTURE TWO
VISION, MISSION AND PURPOSE
2.1 VISION STATEMENT
Vision statement provides direction and inspiration for organizational goal setting. Vision
is where you see yourself at the end of the horizon OR milestone therein. It is a single
statement dream OR aspiration. Typically a vision has the flavors of 'Being Most
admired', 'Among the top league', 'Being known for innovation', 'being largest and
greatest' and so on. Typically 'most profitable', 'Cheapest' etc. don’t figure in vision
statement. Unlike goals, vision is not SMART. It does not have mathematics OR
timelines attached to it. Vision is a symbol, and a cause to which we want to bond the
stakeholders, (mostly employees and sometime share-holders). As they say, the people
work best, when they are working for a cause, than for a goal. Vision provides them that
cause. Vision is long-term statement and typically generic & grand. Therefore a vision
statement does not change unless the company is getting into a totally different kind of
business. Vision should never carry the 'how' part . For example ' To be the most
admired brand in Aviation Industry' is a fine vision statement, which can be spoiled by
extending it to' To be the most admired brand in the Aviation Industry by providing
world-class in-flight services'. The reason for not including 'how' is that 'how' may keep
on changing with time. Challenges related to Vision Statement: Putting-up a vision is not
a challenge. The problem is to make employees engaged with it. Many a time, terms
like vision, mission and strategy become more a subject of scorn than being looked up-
to. This is primarily because leaders may not be able to make a connect between the
vision/mission and people’s every day work. Too often, employees see a gap between
the vision, mission and their goals & priorities. Even if there is a valid/tactical reason for
this mis-match, it is not explained. Horizon of Vision: Vision should be the horizon of 5-
10 years. If it is less than that, it becomes tactical. If it is of a horizon of 20+ years (say),
it becomes difficult for the strategy to relate to the vision. Features of a good vision
statement:
• Easy to read and understand.
• Compact and Crisp to leave something to people’s imagination.
• Gives the destination and not the road-map.
• Is meaningful and not too open ended and far-fetched.
• Excite people and make them get goose-bumps.
• Provides a motivating force, even in hard times.
• Is perceived as achievable and at the same time is challenging and compelling,
stretching us beyond what is comfortable.
Vision is a dream/aspiration, fine-tuned to reality: The Entire process starting from
Vision down to the business objectives, is highly iterative. The question is from where
should we start. We strongly recommend that vision and mission statement should be
made first without being colored by constraints, capabilities and environment. This can
said akin to the vision of armed forces, that’s 'Safe and Secure country from external
threats'. This vision is a nonnegotiable and it drives the organization to find ways and
means to achieve their vision, by overcoming constraints on capabilities and resources.
Vision should be a stake in the ground, a position, a dream, which should be prudent,
but should be nonnegotiable barring few rare circumstances.
2.2 Mission Statement
Mission of an organization is the purpose for which the organization is. Mission is again
a single statement, and carries the statement in verb. Mission in one way is the road to
achieve the vision. For example, for a luxury products company, the vision could be 'To
be among most admired luxury brands in the world' and mission could be 'To add style
to the lives'
A good mission statement will be :
• Clear and Crisp: While there are different views, We strongly recommend that mission
should only provide what, and not 'how and when'. We would prefer the mission of
'Making People meet their career' to 'Making people meet their career through effective
career counseling and education'. A mission statement without 'how & when' element
leaves a creative space with the organization to enable them take-up wider strategic
choices.
• Have to have a very visible linkage to the business goals and strategy: For example
you cannot have a mission (for a home furnishing company) of 'Bringing Style to
People’s lives' while your strategy asks for mass product and selling. Its better that
either you start selling high-end products to high value customers, OR change your
mission statement to 'Help people build homes'.
• Should not be same as the mission of a competing organization. It should touch upon
how its purpose it unique.
Mission follows the Vision: The Entire process starting from Vision down to the business
objectives, is highly iterative. The question is from where should be start. I strongly
recommend that mission should follow the vision. This is because the purpose of the
organization could change to achieve their vision. For example, to achieve the vision of
an Insurance company 'To be the most trusted Insurance Company', the mission could
be first 'making people financially secure' as their emphasis is on Traditional Insurance
product. At a later stage the company can make its mission as 'Making money work for
the people' when they also include the non-traditional unit linked investment products.
2.3.1 Mission Statement Components
Mission statements can and do vary in length, content, format, and specificity. Most
practitioners and academicians of strategic management feel that an effective statement
should include nine components. Because a mission statement is often the most visible
and public part of the strategic-management process, it is important that it includes the
nine characteristics as summarized in Table 2-4, as well as the following nine
components:
1. Customers—Who are the firm’s customers?
2. Products or services—What are the firm’s major products or services?
3. Markets—Geographically, where does the firm compete?
4. Technology—Is the firm technologically current?
5. Concern 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. Concern for employees—Are employees a valuable asset of the firm?
Excerpts from the mission statements of different organizations are provided in
Examples of the Nine Essential Components of a Mission Statement
1. Customers We believe our first responsibility is to the doctors, nurses, patients,
mothers, and all others who use our products and services. (Johnson & Johnson) To
earn our customers’ loyalty, we listen to them, anticipate their needs, and act to create
value in their eyes. (Lexmark International)
2. Products or Services AMAX’s principal products are molybdenum, coal, iron ore,
copper, lead, zinc, petroleum and natural gas, potash, phosphates, nickel, tungsten,
silver, gold, and magnesium. (AMAX Engineering Company) Standard Oil Company
(Indiana) is in business to find and produce crude oil, natural gas, and natural gas
liquids; to manufacture high-quality products useful to society from these raw materials;
and to distribute and market those products and to provide dependable related services
to the consuming public at reasonable prices. (Standard Oil Company)
3. Markets We are dedicated to the total success of Corning Glass Works as a
worldwide competitor. (Corning Glass Works) Our emphasis is on North American
markets, although global opportunities will be explored. (Blockway) 4. Technology
Control Data is in the business of applying micro-electronics and computer technology
in two general areas: computer-related hardware; and computing-enhancing services,
which include computation, information, education, and finance. (Control Data) 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 Universal) To serve the worldwide need for
knowledge at a fair profit by adhering, evaluating, producing, and distributing valuable
information in a way that benefits our customers, employees, other investors, and our
society. (McGraw-Hill)
6. Philosophy Our world-class leadership is dedicated to a management philosophy
that holds people above profits. (Kellogg) It’s all part of the Mary Kay philosophy—a
philosophy based on the golden rule. A spirit of sharing and caring where people give
cheerfully of their time, knowledge, and experience. (Mary Kay Cosmetics)
7. Self-Concept Crown Zellerbach is committed to leapfrogging ongoing 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 the
environment. (Dow Chemical) To contribute to the economic strength of society and
function as a good corporate citizen on a local, state, and national basis in all countries
in which we do business. (Pfizer)
9. Concern for Employees To recruit, develop, motivate, reward, and retain personnel
of exceptional ability, character, and dedication by providing good working conditions,
superior leadership, compensation on the basis of performance, an attractive benefit
program, opportunity for growth, and a high degree of employment security. (The
Wachovia Corporation) 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 Compan
2.3.2 Characteristics of a Mission Statement
• Broad in scope; do not include monetary amounts, numbers, percentages, ratios, or
objectives
• Less than 250 words in length
• Inspiring
• Identify the utility of a firm’s products
• Reveal that the firm is socially responsible
• Reveal that the firm is environmentally responsible
• Include nine components customers, products or services, markets, technology,
concern for survival/growth/ profits, philosophy, self-concept, concern for public image,
concern for employees
• Reconciliatory
• Enduring
TOYOTA Vision -Toyota aims to achieve long-term, stable growth economy, the local
communities it serves, and its stakeholders. Mission -Toyota seeks to create a more
prosperous society through automotive manufacturing. IBM Vision Solutions for a small
planet Mission At IBM, we strive to lead in the invention, development and manufacture
of the industry's most advanced information technologies, including computer systems,
software, storage systems and microelectronics. We translate these advanced
technologies into value for our custoomers through our professional solutions, services
and consulting businesses worldwide.
2.4 Ten Benefits of Having a Clear Mission and Vision
1. Achieve clarity of purpose among all managers and employees.
2. 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.
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve divergent views among managers.
6. Promote a sense of shared expectations among all managers and employees. 7.
Project a sense of worth and intent to all stakeholders.
8. Project an organized, motivated organization worthy of support.
9. Achieve higher organizational performance.
10. Achieve synergy among all managers and employees.
2.5 BUSINESS, OBJECTIVES AND GOALS
A business (also known as enterprise or firm) is an organization engaged in the trade of
goods, services, or both to consumers. Businesses are predominant in capitalist
economies, in which most of them are privately owned and administered to earn profit to
increase the wealth of their owners. Businesses may also be not-forprofit or state-
owned. A business owned by multiple individuals may be referred to as a company,
although that term also has a more precise meaning.
Goals : It is where the business wants to go in the future, its aim. It is a statement of
purpose, e.g. we want to grow the business into Europe. Objectives: Objectives give the
business a clearly defined target. Plans can then be made to achieve these targets.
This can motivate the employees. It also enables the business to measure the progress
towards to its stated aims. The Difference between goals and objectives
• Goals are broad; objectives are narrow.
• Goals are general intentions; objectives are precise.
• Goals are intangible; objectives are tangible.
• Goals are abstract; objectives are concrete.
• Goals can't be validated as is; objectives can be validated.
2.6 SUMMARY
Every organization has a unique purpose and reason for being. This uniqueness should
be reflected in vision and mission statements. The nature of a business vision and
mission can represent either a competitive advantage or disadvantage for the firm. An
organization achieves a heightened sense of purpose when strategists, managers, and
employees develop and communicate a clear business vision and mission. Drucker
says that developing a clear business vision and mission is the “first responsibility of
strategists.”
A good mission statement reveals an organization’s customers; products or services;
markets; technology; concern for survival, growth, and profitability; philosophy; self-
concept; concern for public image; and concern for employees. These nine basic
components serve as a practical framework for evaluating and writing mission
statements. As the first step in strategic management, the vision and mission
statements provide direction for all planning activities.
Well-designed vision and mission statements are essential for formulating,
implementing, and evaluating strategy. Developing and communicating a clear business
vision and mission are the most commonly overlooked tasks in strategic management.
Without clear statements of vision and mission, a firm’s short-term actions can be
counterproductive to long-term interests. Vision and mission statements always should
be subject to revision, but, if carefully prepared, they will require infrequent major
changes. Organizations usually reexamine their vision and mission statements annually.
Effective mission statements stand the test of time.
Issues for Review and Discussion
1. What are some different names for “mission statement,” and where will you likely find
afirm’s mission statement?
2. If your company does not have a vision or mission statement, describe a good
process for developing these documents.
3. Explain how developing a mission statement can help resolve divergent views among
managers in a firm.
4. Drucker says the most important time to seriously reexamine the firm’s vision/mission
is when the firm is very successful. Why is this?
5. Explain why a mission statement should not include monetary amounts, numbers,
percentages, ratios, goals, or objectives.
6. Discuss the meaning of the following statement: “Good mission statements identify
the utility of a firm’s products to its customers.”
7. Distinguish between the “self-concept” and the “philosophy” components in a mission
statement. Give an example of each for your university.
8. When someone or some company is “on a mission” to achieve something, many
times they cannot be stopped. List three things in prioritized order that you are “on a
mission” to achieve in life.
9. Compare and contrast vision statements with mission statements in terms of
composition and importance.
10. Do local service stations need to have written vision and mission statements? Why
or why not?
11. Why do you think organizations that have a comprehensive mission tend to be high
performers? Does having a comprehensive mission cause high performance?
12. Explain why a mission statement should not include strategies and objectives.
13. What is your college or university’s self-concept? How would you state that in a
mission statement?
14. Explain the principal value of a vision and a mission statement.
15. Why is it important for a mission statement to be reconciliatory?
16. In your opinion, what are the three most important components that should be
included when writing a mission statement? Why?
17. How would the mission statements of a for-profit and a nonprofit organization differ?
18. Write a vision and mission statement for an organization of your choice.
19. Conduct a search on the Internet with the keywords vision statement and mission
statement.
20. Find various company vision and mission statements, and evaluate the documents.
Write a one-page single-spaced report on your findings.
21. Who are the major stakeholders of the bank that you do business with locally? What
are the major claims of those stakeholders?
21. List seven characteristics of a mission statement.
22. List eight benefits of having a clear mission statement.
23. How often do you think a firm’s vision and mission statements should be changed?