Chapter Three
The Business Mission
Nature of Business Mission
A mission is defined as the fundamental purpose of the
organization and its scope of operation.
Mission refers to the purpose or reason for the
organization existence.
It distinguish one business form other similar firms.
It defines scope of firms operations in product and
market terms.
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Dr. Tizazu K.
Cont…
A mission statement broadly charts the future direction of
an organization.
For example, the mission of Ambo University is
• to produce competent and determined human resource
through programs at graduate, undergraduate, and short
term training programs.
• conducting research and consultancy and rendering
community service to public, private and non-profit
organizations.
• so that beneficiaries could receive superior value products
and services and thereby enriches our staff and partners to
share our success.” 2
The importance of a clear mission
To ensure unanimity(unity) of purpose within the
organization.
To provide a basis for motivating the use of the
organization’s resources.
To develop a basis or standard, for allocating
organizational resources.
Provides the boarding for strategy formulation.
It provide guidance for strategy making
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Cont….
Mission statement acts as touch stone for decision
making.
Mission statement outlines norms of individual
behavior. It provides ethical standard for organization
To facilitate the translation of objectives and goals into
a work structure involving the assignment of tasks to
responsible elements within the organization.
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Cont….
Formally acknowledge responsibilities toward various
stakeholders & set standards for organizational performance
along a stated dimension.
• Stakeholders are interested parties which affects and
affected by organization.
• Stakeholder include;
Shareholders
Customers
Staff
Suppliers
Market intermediaries
Government etc.
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Characteristic of a good mission
Every organization has mission either defined explicitly or
may be deduced from the actions of its top Management.
While framing the mission statement, the following
points should be taken into consideration so that it serves
the purpose for which it is prepared:
It should be feasible. Followers should not fill it is
impossible.
It should be precise – not too narrow and not too broad.
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Cont….
It should be clear, both in terms of intentions and words
used to lead to action.
It should be motivating for employees , customers and
society.
It should be distinctive or unique.
It should indicate major components of strategy.
It should indicate how objectives are to be accomplished-
give clue how to accomplish objective.
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Components of a Mission Statement
Mission statements can and do vary in length, content,
format, and specificity.
- Components and corresponding questions that a mission
statement should answer are given here. These are:
Customers – Who are the firm’s customers?
Products or services – What are the firm’s major
products or services?
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Cont…..
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?
Markets – Geographically, where does the firm
compete?
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Cont….
Technology – Is the firm technologically current?
Concern for employees – Are employees a valuable,
asset of the firm?
Concern for public image – Is the firm responsive to
social, community, and environmental concerns?
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thanks
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