Chapter 2: “THE BUSINESS VISION AND MISSION”

In the beginning, a new business is simply a collection of ideas. Starting a new business rests on set of beliefs that the new organization can offer some product or service to some customers, in some geographic area, using some type of technology, at a profitable price. Vision and Mission statements often can be found in the front of annual reports.
What do we want to become?
It is specially important for managers and executives in any organization to agree on the basic vision that the firm strives to achieve in the long term. A vision statement should answer the basic question, “What do we want to become?” A clear vision provides the foundation for developing a comprehensive mission statement. The vision statement should be short, preferably one sentence.
What is our business?
Current thought on mission statement is based largely on guidelines set forth in the mid 1970s by Peter Drucker, who is called “the father of modern management” for his pioneering studies at General Motors Corporation. Harvard Business Review has called Drucker “the preeminent management thinker of our time”.

Visión versus Mission
Many organization develop both a mission statement and a vision statement. Whereas the mission statement answer the question “What is our business?” the vision statement answer the question “what do we want to become”

It can be argued that profit, not mission or vision, is the primary corporate motivator. Profit is perceived negatively by some employees in companies. Employees may see profit as something they earn and management then uses and even gives away shareholders. Although this perception is undesired and disturbing to management, it clearly indicates that both profit and vision are needed to motivate a workforce effectively.

The process of Developing Vision and Mission Statements
As indicated in the strategic-management model, clear vision and mission statements are needed before alternative strategies can be formulated and implemented. As many managers as possible should be involved in the process of developing these statements because though involvement, people become committed to an organization.


Benefits of vision and mission statements

According to Rarick and Vitton they found that the mission statement have a twice the average return on shareholders equity than those firms without a formalizes mission
Business Week reports that firms using mission statement have a 30 percent higher return on certain financial measures than those without such statements.
However, some studies have found that having mission statements does not directly contribute positively to financial performance.
The divergent views among managers can be revealed and resolved through the process.

A genius decision for a mission statement must be based on divergent views to have a chance to be a right and effective decision. It is always a choice between alternatives, each of which rests on different assumptions regarding the reality business and its environment and communicating with important internal and external stakeholders.


Characteristics of a mission statement

A mission statement is more than specific details; A good mission statement describes an organization’s purpose, customers, products or services, market, philosophy, and basic technology. A mission statement should define what the organization is and what it aspires to be.

Be limited enough to include some ventures and broad enough to allow for work for creative growth. distinguish a given organization from all other, serve as a framework for evaluating both current and prospective activities and be stated in terms sufficiently clear to be widely understood throughout the organization


A effective mission should include nine components because mission statement is often the most visible and public part of the strategic-management process.

Customer.
Product or services
Market
Technology
Concern for survival, growth, and profitability
Philosophy
Self-concept
Concern for public image
Concern for employees.


Here are some characteristics what a mission statement must have:
-Broad in scope
-Less than 250 words in length
-inspiring
-Identify the utility of a firm’s products
-Reveal that the firms is socially responsible
-Reveal that the firms is environmentally responsible
-Include nine components
-Reconciliatory
-Enduring