Strategic Management lecture # 04
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The document summarizes a lecture on strategic management. It discusses the nature and role of vision and mission statements, providing characteristics of each. The lecture covers developing vision and mission statements through an inclusive process involving managers. Clear vision and mission statements provide benefits like prioritizing strategies and allocating resources. A good mission statement is broad in scope, under 150 words, inspirational, reveals products and services, and is socially and environmentally responsible.
Strategic Management lecture # 04
- 1. JahanUniversity BachelorofBusinessAdministration Departmentof BusinessAdministration Subject: Strategic Management Lecture# Fourth Lecturer: Hijratullah Tahir 1
- 2. Objectives of the lecture After completion of this lecture students will be able to know: 1. Nature and Role of vision statement in the strategic management 2. Nature and Role of mission statement in the strategic management 3. Vision statements and its characteristics 4. Mission statement and its characteristics 2
- 3. Outline of the lecture Topic 1: Describe the nature and role of vision statements in strategic Mgt. Topic 2: Describe the nature and role of mission statements in strategic Mgt. Topic 4: Discuss the process of developing a vision and mission statement. Topic 5: Discuss how clear vision and mission statements can benefit other strategic-management activities. Topic 6: Describe the characteristics of a good mission statement. Topic 7: Identify the components of mission statements. 3
- 4. Vision Statement • 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. • Vision statement should be established first and foremost 4
- 5. Vision Statement Analysis • At a minimum, a vision statement should reveal the type of business the firm engages. • For example, to have a vision that says, “to become the best retailing firm in the USA” is much too broad, because that firm could be selling anything. 5
- 6. Mission Statement • Mission statements is based on guidelines set forth in the mid-1970s by Peter Drucker, • Drucker; “What is our business?” is synonymous with asking “What is our mission?” • Distinguishes one organization from other similar enterprises, • “Reason for being.” A clear mission statement is essential for effectively establishing objectives and formulating strategies. 6
- 7. Process of Developing vision and mission • Clear vision and mission are needed before strategy formulation • As many managers as possible should be involved in the process. • Select several articles about statements and ask managers to read. • Managers will individually prepare a vision and mission for the firm. • Assigned committee; will merged statements into single draft. • A request for modifications, additions, and deletions is needed next, along with a meeting to revise the document. • To the extent that all managers have input into and support the final7
- 8. Process of Developing vision and mission • All managers have input into and support the final documents. • Eventually, final version will be approved. • Thus, the process represents a great opportunity for strategists to obtain needed support from all managers in the firm. 8
- 9. Importance of Vision and Mission 9 There is a positive relationship between mission statements and measures of financial performance. 1. To make sure all employees/managers understand the firm’s purpose or reason for being. 2. To provide a basis for prioritization of key internal and external factors utilized to formulate feasible strategies. 3. To provide a basis for the allocation of resources. 4. To provide a basis for organizing work, departments, activities, and segments.
- 10. Characteristics of Mission statement • Broad in scope, • Fewer than 150 words, • Must be Inspirable; • Reveal about firm’s products; • Shows firm Socially responsible and environmentally responsible • Friendly and • Enduring. 10
- 11. Components of Mission statement 11 Customers Markets Philosophy Self-concept Technology Products Services Survival, Growth & Profitability Public image Employees
- 12. Conclusion 12 • Characteristics and Benefits of objectives • Define and give an example of eleven types of strategies • Identify and discuss the three types of Integration Strategies. • Market penetration, market and/ or product development. • Explain when diversification is an effective business strategy. • Retrenchment, divestiture, and liquidation • Porter’s five generic strategies.
- 13. References 1. Strategic Management Concepts and Cases Sixteen Edition by Fred R. David. 2. Fundamental of Business Management Process by Marlon Dumas and Jan Mandelling. 13
Editor's Notes
- #8: As many managers as possible should be involved in the process of developing these statements because, through involvement, people become committed to an organization. A widely used approach to developing a vision and mission statement is first to select several articles about these statements and ask all managers to read these as background information.
- #12: 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. 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 (distinctive competence)—What is the firm’s major competitive advantage? 8. Public image—Is the firm responsive to social, community, and environmental concerns? 9. Employees—Are employees a valuable asset of the firm