Strategic Management: Concepts

and Cases
Arab World Edition
Fred R. David
Abbas J. Ali
Abdulrahman Y. Al-Aali

Chapter 2:
The Business Vision and
Mission

Ch 2 -1 Copyright © 2011 Pearson Education

 Chapter Outline

• Importance of Vision and Mission Statements

• What Do We Want to Become?

• What Is Our Business?

• Characteristics of a Mission Statement

• Components of a Mission Statement

• Writing & Evaluating Mission Statements

Ch 2 -2 Copyright © 2011 Pearson Education

Ch 2 -3 Copyright © 2011 Pearson Education
 Vision & Mission Statements

• Many organizations develop both vision & mission

statements
• Profit & vision are necessary to effectively motivate a
workforce
• Shared vision creates a community of interests
• Participation from diverse managers is important in
developing the mission

Ch 2 -4

Ch 2 -4 Copyright © 2011 Pearson Education

 Developing Vision & Mission

Clear mission is needed before alternative strategies can be

formulated and implemented

Copyright © 2011 Pearson Education

Ch 2 -5
 Vision Statements

“The last thing IBM needs right now is a

vision.”
(July 1993)

“What IBM needs most right now is a

vision.”
Louis V. Gerstner, Jr., CEO, IBM Corporation (March 1996)

Ch 2 -6 Copyright © 2011 Pearson Education

 Vision Statements

What do we want to become?

Agreement on the basic vision for which a firm strives to

achieve in the long run is critically important to the firm’s
success.

Ch 2 -7 Copyright © 2011 Pearson Education

 Vision Statements

Clear Business
Vision

Comprehensive
Mission Statement

Ch 2 -8 Copyright © 2011 Pearson Education

 Vision Statements

A Shared Vision:
• Creates commonality of interests
• Reduces daily monotony
• Provides opportunity & challenge

Ch 2 -9 Copyright © 2011 Pearson Education

 Vision Statement Examples

Dubai International Financial Centre

To shape tomorrow’s financial map as a global gateway for
capital and investment.

Alghanim Group
To become Kuwait’s leading diversified conglomerate in
terms of both quality and size, and a significant player in
carefully targeted international markets.

Ch 2 -10 Copyright © 2011 Pearson Education

 Vision Statement Examples

Oman Telecommunications Company

To be [a] highly innovative telecommunications company.

Jordan River Foundation

To empower society, especially women and children, and in
turn, improve the quality of life to secure a better future for
all Jordanians.

Ch 2 -11 Copyright © 2011 Pearson Education

 Mission Statements

What is our business?

Ch 2 -12 Copyright © 2011 Pearson Education

 Mission Statements

A mission statement:
• Is an enduring statement of purpose
• Distinguishes one firm from another
• Declares the firm’s reason for being

90% of all companies have used a mission statement in

the previous five years.

Ch 2 -13 Copyright © 2011 Pearson Education

 Mission Statements

Mission statements can also be referred to as:

• Creed statement
• Statement of purpose
• Statement of philosophy
• Statement of business principles

Ch 2 -14 Copyright © 2011 Pearson Education

 Mission Statements

• Reveal what an organization’s business and whom it

wants to serve

• Essential for effectively establishing objectives and

formulating strategies

Ch 2 -15 Copyright © 2011 Pearson Education

 Mission Statement Examples

Isam K. Kabbani Group

To provide our part of the Arab world with local and reliable
services in a variety of sectors and products. To create
employment to thousand of personnel and in-house training
for hundreds of young Arab graduates in crucial sectors to
the benefit of the IKK Group, the graduates themselves and
their own communities. To set a good example of our basic
business philosophy: “Hire well, train well, pay well and
treat well.”

Ch 2 -16 Copyright © 2011 Pearson Education

 Mission Statement Examples

Saudi Research and Marketing Group

To provide high content media services and products that
are high quality and reliable. To build numerous media
platforms. To continually invent new products to meet the
needs of various social categories in various regions. To
service readers, audience and advertisers.

Ch 2 -17 Copyright © 2011 Pearson Education

 Mission Statement Examples

Etisalat
To extend people’s reach. At Etisalat, we are actively
developing advanced networks that will enable people to
develop, to learn and grow.

Sharjah Islamic Bank

Sharjah Islamic Bank aims to provide the best services by
commitment and dedication, forged by a mission to serve
people and the society in order to contribute towards its
growth. Our mission has multiple dimensions aimed at
communicating with all of our different audiences.

Ch 2 -18 Copyright © 2011 Pearson Education

 Mission Statement Examples

Gulf Glass Manufacturing

Our Mission is to be the World’s best supplier among the
glass (industries) and to achieve leadership position in Gulf
Market(s) by serving the needs of our customers in
innovative ways. By saying World’s Best we mean a
consistently growing company that supplies quality glass
products and superior service. Being a successful company,
we can facilitate continuous improvement of products and
continue to serve those to whom we are responsible: our
customers and our employees. We believe that these
principle(s) are a blue print for success. If we live by them,
we will achieve our mission by maintaining a spirit of
excellence in everything we do.

Ch 2 -19 Copyright © 2011 Pearson Education

 Class work
Time: 15 minutes

• What is your organisation’s • Write a vision and mission

vision and mission statement for your
statements? If known to organisation/ university?
you?
• What is it concerned about?
• IF NOT THEN.. (i.e. elements it covers)

Ch Copyright 2009 Prentice Hall

 Importance of Mission

Benefits from a strong mission

Unanimity of Purpose

Resource Allocation
Mission
Organizational
Climate

Focal Point for Work

Structure

Ch 2 -21 Copyright © 2011 Pearson Education

 Characteristics of Effective Missions

• Broad in scope
• Generate strategic alternatives
• Not overly specific
• Reconciles interests among diverse stakeholders
• Finely balanced between specificity and generality
• Arouse positive feelings and emotions

Ch 2 -22 Copyright © 2011 Pearson Education

 Characteristics of Effective Missions (Cont’d)

• Motivate readers to action

• Generate favourable impression of the firm
• Reflect future growth
• Provide criteria for strategy selection
• Basis for generating & evaluating strategic options
• Are dynamic in nature

Ch 2 -23

Ch 2 -23 Copyright © 2011 Pearson Education

 Natural Environmental Perspective
Is Your Firm Environmentally Proactive?

• Preserving the natural resources is good business!

• Reactive environmental policies can be expensive
• Proactive policies force companies to innovate and
upgrade processes

Ch 2 -24

Ch 2 -24 Copyright © 2011 Pearson Education

 Mission & Customer Orientation

An effective mission statement:

• Anticipates customer needs

• Identifies customer needs

• Provides product/service to satisfy needs

Ch 2 -25 Copyright © 2011 Pearson Education

 Social Policy & Mission

Managerial philosophy shapes social policy and Affects

development of vision & mission

Responsibilities to:
• Consumers
• Environmentalists
• Minorities
• Communities

Ch 2 -26 Copyright © 2011 Pearson Education

 Social Policy & Mission

• Social policy should be integrated in all strategic-

management activities.
• Mission should convey the social responsibility of the
firm.

Ch 2 -27 Copyright © 2011 Pearson Education

 Mission Statements
2009 Most Admired in Social Responsibility
(Fortune Magazine)

1. Marriot International 6. Edison

2. Integrys Energy Group 7. Starbucks
3. Walt Disney 8. Steelcase
4. Herman Miller 9. Union Pacific
10. Fortune Brand

Ch 2 -28 Copyright © 2011 Pearson Education

 Mission Statements
2009 Least Admired in Social Responsibility
(Fortune Magazine)

1. Circuit City Stores 6. Hon Hai Precision Industry

2. Family Dollar Stores 7. Fiat
3. Dillard’s 8. REMEX
4. Sears Holdings 9. Surgutneftegas
5. Tribune 10. Huawel Technologies

Ch 2 -29 Copyright © 2011 Pearson Education

 Mission Statements: Financial
Benefits

Research results are mixed, however, firms with formal mission

statements generally see a:
• 2x average return on shareholders’ equity
• Positive relationship to company performance
• 30% higher return on certain financial measures.

Ch 2 -30 Copyright © 2011 Pearson Education

 Global Perspective
Social Policies on Retirement

Japan Versus the World:

• Labor shortages due to aging population

• Shortages can be met by immigration

• Historical barriers to immigration in Japan lead to

significant economic problems

Ch 2 -31 Copyright © 2011 Pearson Education

 Products
or Services Markets
Customers

Mission Technology
Employees
Components

Survival,
Growth,
Public Profits
Image Self- Philosophy
Concept beliefs, values, ethical
Competitive Advantage

Ch 2 -32 Copyright © 2011 Pearson Education

Ch 2 -33 Copyright © 2011 Pearson Education
 Mission Statement Evaluation Matrix
Compon- Compon- Compon Compon-
Component ent ent Component Component -ent ent Component Component

Concern for
Products Survival, Concern Concern Total
or Growth, Philo- Self- for Public for out of
Customers Services Markets Profitability Technology sophy Concept Image Employees 9
Organiz-
ation
Isam K.
Kabbani
Group No Yes Yes Yes No Yes No Yes Yes 5
Saudi
Research
and
Marketing
Group Yes Yes Yes No Yes No No No No 4

Etisalat No No No No Yes No No No No 1
Sharjah
Islamic
Bank No No No Yes No No Yes No No 2
Gulf
Glass
Manufact-
uring Yes Yes No Yes No No No Yes Yes 5

SABIC No No No Yes No No Yes Ch 2 -34 No No 2

Ch 2 -34 Copyright © 2011 Pearson Education

 Recap on Task No.1
(10 minutes)

• Based on your presented or developed Mission statement

for your company or University, evaluate this mission using
the “Mission Statement Evaluation Matrix”.

What elements are missing?

Based on this evaluation, can you suggest improvements?

Copyright © 2009 Pearson Education, Inc. Ch 2 -35

Publishing as Prentice Hall
 Process of developing a mission statement

Participation from diverse managers is important in developing the

mission
1) First, ask managers to read articles about mission statements.
2) Ask each manager to prepare a mission statement for the
organization.
3) A facilitator/ committee leader merge all these statements into a
single document.
4) Distribute this document among managers.
5) Ask managers to comment and modify on the document to a degree
that each manager has inserted some input.
6) A meeting is held to gain consensus and uniform shape for mission.
Copyright © 2009 Pearson Education, Inc. Ch 2 -36
Publishing as Prentice Hall
 For Review (Chapter 2)

Key Terms & Concepts

Concern for Employees Customers

Concern for Public

Markets
Image

Survival, Growth, & Mission Statement

Profitability Components

Creed Statement Managerial Philosophy

Ch 2 -37 Copyright © 2011 Pearson Education

 For Review (Chapter 2)

Key Terms & Concepts

Self-Concept Stakeholders

Social Policy Vision Statement

Ch 2 -38 Copyright © 2011 Pearson Education

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Ch 2 -39 Copyright © 2011 Pearson Education