Ch 2 -1Copyright © 2011 Pearson Education. Strategic Management: Concepts and Cases Arab World...

Strategic Management: Concepts and CasesArab World EditionFred R. DavidAbbas J. AliAbdulrahman Y. Al-Aali

Chapter 2: The Business Vision andMission


Chapter Outline

Ch 2 -3

• 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

Copyright © 2011 Pearson Education

Vision Statement

What is the definition of vision ?Where can you find the vision

statement of any organization? Examples of vision statements .Why the vision is important?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 2 -5

Vision is defined as the main target/goal that any organization strive to achieve in the long term

Vision statement characteristics :-

• It should answer the question what do we want to become?

• It provides the foundation for developing a comprehensive mission

• It should be established first and foremost the mission• It should be short (one sentence if possible ).

• Participation from many managers is important in developing the mission statement

• However , most of the Arab companies stated visions statement , most of them are not well articulated (results of researches )


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Where can you find the vision statement of any organization ?

• Since the vision of any organization must be explicit ,it is easy to find it on the website of the organization in section called (about us – our profile )


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“our vision is to be the preferred world leader in chemicals .”(SABIC)

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Vision Statements examples

“ Our vision is to shape tomorrow’s financial map as a global gateway for capital and investment .”

Dubai International Financial Centre (DIFC)


Vision Statements examples

• “ our vision is to be the leading provider of innovative financial services in accordance with the legislation of Allah” Dubai Islamic Bank

• “ our vision is to be a highly innovative telecommunication company ” Oman Telecommunications Company


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Ch 2 -10

Vision Statements benefit


Agreement on the basic vision is critically important to the firm’s success. Because the shared established of vision :-

• Creates commonality of interests

• Reduces daily Routine

• Provides opportunity & challenge

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ComprehensiveMission Statement

Vision Statements

Clear Business Vision


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Mission Statements


What is the definition of mission ?Where can you find the mission of any organization?Missions examples.Why mission is important?

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Mission statement is defined as a brief description of a company's fundamental purpose. It answers the question, "Why do we exist?"

Mission statement characteristics :

• It answers the question, “ what is our business ?

• Declares the firm’s reason for being "Why do we exist?“

• It distinguishes one firm from another

• It articulates the company's purpose both for those in the organization and for the public.

• 90% of all companies have used a mission statement in the previous five years.


Ch 2 -14

Mission Statements

Mission statements can also be referred to as:

• Creed statement

• Statement of purpose

• Statement of philosophy

• Statement of business principles

• It could be founded on the website of the organization in section called (about us/ our profile )


Isam K. Kabbani (IKK) 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,. To set a good example of our basic business philosophy: “Hire well, train well, pay well and treat well.”

Ch 2 -15

Mission Statement Examples


Saudi Research and Marketing GroupTo 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.

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

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Sharjah Islamic BankSharjah Islamic Bank aims to provide the best services by commitment 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.

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 will achieve our mission by maintaining a spirit of excellence in everything we do.

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Ch 2 -19

Importance of Mission

MissionResource Allocation

Unanimity of Purpose

Organizational Climate

Focal Point for Work Structure

Benefits from a strong mission


Mission & vision differences


Ch 2 -20

Focus Vision Mission

the main Q what do we want to become ??

What is our business?

Scope More broader Less broader

Long Must be short(one sentence if

possible)

More longer

Role It is the foundation of the mission

The foundation of objectives , plans , strategy ,and policies .

Mission development as a process

For mission to be developed a wide approach must be undertaken :-

1) Reading articles (as background)by managers 2) preparation of mission statements 3) A facilitator should integrate these statements into a

single documents 4) Distributing the draft mission to all managers5) Modifications , additions, changes are requested

(evaluation)Note Organizations can manage this process internally (by

discussion group) , or externally by consultant or external facilitator


Ch 2 -21

Ch 2 -22

The Effective Missions requirements


• Broad in scope

• Generate strategic alternatives

• Reconciles interests among diverse stakeholders

• Reflects a balance between specifications &generalizations

• Arouse positive feelings and emotions

• Motivate employees to action

• Generate favourable impression of the firm

• Reflect future growth

• Provide criteria for strategy selection

• Dynamic in nature

Importance (Benefits) of Vision &Mission statements

• According the research results, many benefits can be achieved through the formalized mission:-

• 2x average return on shareholders’ equity

• Positive relationship to company performance

• 30% higher return on certain financial measures


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Why organizations must carefully develop a written mission statement?

To keep the following benefits:-

To ensure unanimity of purpose within the organization

To provide a basis or standard for maximizing the resources allocation

To establish a general tone or organizational climate To facilitate putting the objectives and polices into

actions To maximizing the efficiency of resource allocation

process


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Characteristics of a Mission

• First :A declaration of attitude

• Second :A customer orientation

• Third: A declaration of social Policy


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A mission statement is a declaration of attitude

• It must be broad in scope not only a statement of specific details

• It should not be too lengthy, recommended length is less than 250 words

• It must arouse positive feelings and emotion • It must generate a good impression that the firm

is successful, has direction, and is worthy of time • It must imply the growth directions in the future• It must serve as a framework for evaluating both

current and prospective activities.


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• Define what the organization is.

• Define what it aspires to be.

• Broad enough to allow for growth

• Distinguishes firm from all others

• Stated clearly – understood by all

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A mission must be a customer orientation through what Vern McGinnis mentioned


To be effective customer orientation mission :

• Anticipates customer needs

• Identifies the utility of a firm’s products or

service to the customer (not the clothes- but the

attractive look) (not shoes – but the comfort)

(not the book –but knowledge ) (not the milk -----

but health care ----etc)

• Provides product/service to satisfy needs

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Ch 2 -29

Social Policy & Mission

Mission is a declarative of social policy

• The term Social policy embraces managerial philosophy and thinking at the highest levels of an organization

• Social policy affects the development of a business mission statement

• Mission statement conveys the social responsibility of the firm to consumers ,environmentalists ,minorities ,communities…..etc

• In 2007 Arabian Business magazine rated Saudi German Hospital (SGH) as a highly socially responsible corporation

• Note In the Arab world , rating corporations in terms of social responsibility is a new trend and it will take a time to become a common tradition


Social responsibility examples

• Alfa , a Lebanon – based company developed a program called 4life , intended to support the children in communication need; so they can enjoy life in a dignified and self reliant and participate in their community.

• Dallah group contributes to education and health activities in communities where it operates ------it provides training to sharpen young peoples 'skills and improve their chance of finding suitable position which bring a reasonable income .

• Etsalat offers the freedom package , which serves people with a special need, it was lunched and designed specially to be used to enhance their communication options, additionally it support them by many activities in different areas


Ch 2 -30

Mission Statement Components

• Mission statement can and do vary in length ,content , format,….but it includes the most essential components from the following

1. Customer , who are the firms customer?

2. Products & service, what are the firms main products?

3. Markets ,where does the firm compete?

4. Technology, I s the firm technological current?

5. Concern for survival ,growth, profitability I s the firm committed to growth and financial, soundness?


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6-Philosophy , what are the basic believes , values, and ethical prosperities of the firm?

7-Self- concept, what is the firm major competitive advantages?

8-Concern for public image, is the firm responsive to social , community, and environmental concerns?

9-Concern for employees , are employees a valuable asset of the firm?


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Ch 2 -33

Mission Components

CustomersMarkets

Employees

PublicImage Self-

ConceptPhilosophy

Survival,Growth,Profits

Products or Services

Technology


Writing & Evaluating Mission Statement

• There is no one best mission statement for a particular organization

• Good judgment is required in evaluating mission statement

• Not all companies covers all the nine components in their mission statement.

• The nine basic components serve as a practical framework for evaluating and writing mission statement

• The more components are present in mission statement, the more strong statement it could be

• Evaluation of a mission statement according to the presence of the nine components is just the beginning of the process to assess a statement’s overall


Ch 2 -34

Mission Statement Evaluation Matrix

Component 1

Component 2

Component 3 Component 4 Component 5

Component 6

Component 7

Component 8

Component 9

Customer

Products or

Services Markets Technology

Concern for Survival, Growth,

ProfitabilityPhiloso

phySelf-

Concept

Concern for Public

Image

Concern for

Employees•Total out

of 9

Organizati

ons

Ch 2 -35


Mission Statement Evaluation MatrixComponent 1

Component 2


Component 6


Customers

Products or

Services Markets Technology

Concern for Survival, Growth,

Profitability philosophy

Self-Concept

Concern for Public Image

Concern for Employees Total out of 9

Organization

Isam K. Kabbani Group No Yes Yes No Yes Yes No Yes Yes 6

Saudi Research and Marketing Group Yes Yes Yes Yes No No No No No 4

Etisalat No No No Yes No No No No No 1

Sharjah Islamic Bank No No No No Yes No Yes No No 2

Gulf Glass Manufacturing Yes Yes No No Yes No No Yes Yes 5

SABIC No No No No Yes No Yes No No 2

Ch 2 -36Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

According to the MSEM we can Rank these companies as follow

First

ISAM K.Kabbani Group ---- (includes 6 components out of 9)

Second

Gulf Glass Manufacturing

(includes 5 components out of 9 ).

Third

Saudi Research and Marketing Group

(includes 4 components out of 9 ).

Fourth

Sharjah Islamic Bank & SABIC

(include 2 components out of 9 ).

Fifth

Etisalat (includes 1 components out of 9 ).


Ch 2 -37

Assignment (2)

Individual task

• Try to apply the Mission Statement Evaluation Matrix (MSEM) on the identified companies.

• 3 Companies per student

• Deadline for delivery one week later


Ch 2 -39

Ch 2 -1Copyright © 2011 Pearson Education. Strategic Management: Concepts and Cases Arab World...

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Transcript of Ch 2 -1Copyright © 2011 Pearson Education. Strategic Management: Concepts and Cases Arab World...