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LEARNING OBJECTIVES
After studying this chapter, you should be able to do the following:
2- 1. Explain the need for core values statements in strategic management.
2- 2. Describe the nature and role of vision statements in strategic management.
2- 3. Identify the characteristics of a vision statement.
2- 4. Describe the nature and role of mission statements in strategic management.
2- 5. Identify and discuss the characteristics of an effective mission statement.
2- 6. Identify and discuss the components of mission statements.
2- 7. Discuss the benefits for a firm of having clear vision and mission statements.
2- 8. Evaluate and write mission statements for different organizations.
ASSURANCE-OF-LEARNING EXERCISES
The following exercises are found at the end of this chapter:
SET 1 : Strategic Planning for Coca-Cola
EXERCISE 2A : Develop an Improved Coca-Cola Vision Statement
EXERCISE 2B : Develop an Improved Coca-Cola Mission Statement
EXERCISE 2C : Compare Coca-Cola’s Mission Statement to a Rival Firm’s
SET 2 : Strategic Planning for My University
EXERCISE 2D : Compare Your University’s Vision and Mission Statement to Those of a Rival Institution
SET 3 : Strategic Planning for Myself
EXERCISE 2E : Develop a Vision and Mission Statement for Yourself
SET 4 : Individual versus Group Strategic Planning
EXERCISE 2F : What Is the Relative Importance of Each of the Nine Components of a Mission Statement?
Business Vision and Mission
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C
hapter 2 focuses on the concepts and tools needed to evaluate and write core values, vision, and mission statements. As illustrated with shading in Figure 2-1, carefully prepared statements of vision and mission are widely recognized by both practitioners and academicians as the first step in strategic management. Actual vision and mission statements from large and small organizations and for-profit and nonprofit enterprises are presented and critiqued.The exemplary strategist showcased is Frederick Smith, whose entrepreneurial vision four de- cades ago led to the creation of FedEx, a firm on a mission today to lead the package-delivery industry.
We can perhaps best understand core values, vision, and mission by focusing on a business when it is first started. In the beginning, a new business is simply a collection of ideas. Starting a new business rests on a set of beliefs that the organization can offer some product or service to some cus- tomers in some geographic area using some type of technology at a profitable price. A new business owner typically believes his or her philosophy of the new enterprise will result in a favorable pub- lic image, and the business concept can be effectively communicated to and adopted by important constituencies. When the ideas and beliefs about a business at its inception are put into writing, the resulting documents mirror the same basic ideas that underlie core values, vision, and mission state- ments. As a business grows, owners or managers may revise the founding set of beliefs, but those original ideas usually are still reflected in core values, vision, and mission statements.
Core values, vision, and mission statements often can be found in the front of annual reports and commonly displayed throughout a firm’s premises and distributed with company informa- tion sent to constituencies. These statements are part of numerous internal reports, such as loan requests, supplier agreements, labor relations contracts, business plans, and customer service agreements. However, too many companies and organizations today have no core values, vision, or mission statement, thus missing out on an incredible opportunity to motivate and energize customers, employees, and shareholders, and also jeopardizing their strategic-planning efforts.
Core Values Statements: What Is Our Foundation?
Core values provide the needed ethical foundation for creating an excellent vision and mission. A core values statement specifies a firm’s commitment to integrity, fairness, discipline, equal employ- ment opportunity, teamwork, accountability, continuous improvement, or other such exemplary attri- butes. For example, LinkedIn’s core values (paraphrased) are (1) customers first, (2) relationships matter, (3) be open and honest, (4) require excellence, (5) take intelligent risks, and (6) act like an LO 2.1
EXEMPLARY STRATEGIST SHOWCASED
Frederick W. Smith, Founder and CEO of FedEx Corporation
Headquartered in Memphis, Tennessee, and founded in 1973 by Frederick W. Smith, FedEx is one of the few Fortune 500 companies still led today by its founder. Forty-five years and counting as CEO of any company is quite exemplary, and his company’s vision and mission have changed little in 45 years. Smith’s vision to more quickly deliver time-sensitive mail enabled his company to bypass the U.S. Postal Service and thereby revolutionize the transportation industry. Back in 1973 and in the years that followed, Smith turned his vision of quick delivery into a reality and motivated thousands of workers to adopt the FedEx mission. FedEx was the first U.S. company ever to earn $1 billion in revenues within its first 10 years of business without merging or acquiring other firms. FedEx has grown into a $60 billion global transportation, business services, and logistics iconic U.S. firm.
Led by Smith, FedEx today includes FedEx Services, FedEx Ground, FedEx Freight, and FedEx Express, the latter of which has the world’s largest all-cargo air fleet. Smith says the key to his
success has been “having an effective strategy and everyone under- standing what the strategy is.” With a mission to offer flexible and innovative solutions for everyone from entrepreneurs to large corpo- rations, FedEx’s strategy is based on innovation and a clear purpose.
Many postal services that we take for granted today, such as track- ing mail and packages, were pioneered by an exemplary strategist, Frederick W. Smith.
Source: Based on the FedEx corporate website and a variety of other sources.
Sundry Photography/Shutterstock
Our Mission Is Fast Delivery
Vision Statements: What Do We Want to Become?
It is especially important for managers and executives in any firm to agree on the basic vision the organization 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. Many organizations have both a vision and mission statement, but the vision statement should be established first. Examples of vision statements are provided in Table 2-1. The vision statement should be short, preferably one sentence, and as many manag- ers as possible should have input into developing the statement. In the book of Proverbs in the Bible, Chapter 29, Verse 18, says, “Where there is no vision, the people perish.”
LO 2.2