Corporate Mission and Objectives

11 Key excerpts on "Corporate Mission and Objectives"

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  eBook - ePub

  Organisations and the Business Environment

  • Tom Craig, David Campbell(Authors)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  Organisational and Business Objectives

  DOI: 10.4324/9780080454603-2

  Learning Objectives

  After studying this chapter, students should be able to describe:

  • mission, vision and values of an organisation;
  • the purpose of an organisation’s mission statement;
  • the complex nature of defining business goals and objectives;
  • the most important business objective;
  • the stakeholders;
  • the view that stakeholder coalitions determine the business objectives;
  • the view that an organisation’s principals essentially determine the business objectives.

  2.1 Vision

  This is an aspirational view of the desired state of the organisation at a point in the future. The timeframe is dependent on the nature of the organisation and its environment but a typical vision would be set for 3–5 years ahead and reviewed annually in line with actual results and changing circumstances. The vision is in effect a statement of strategic intent that serves to focus the energies of the organisation management towards the setting and achievement of specific goals and objectives. Its aspirational nature means that it is consistently revised, as each set of goals are achieved, and further stretching future situations are established.

  2.2 Mission

  The mission of an organisation is a general expression of the overall purpose of the organisation or, more simply, a broad description of the business it is in – its raison d’être. It broadly defines the scope and boundaries of the organisation, which should be in line with the expectations and values of major stakeholders.

  Mission Statements

  Some organisations find it helpful to provide a concise and clear written statement of their broad objectives. Whilst such statements are called different names, most find the term mission statement

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  Corporate Purpose

  Why It Matters More Than Strategy

  • Shankar Basu(Author)
  • 2017(Publication Date)
  • Taylor & Francis

    (Publisher)

  30 According to them, the first component of a company’s strategy is a sense of purpose. This purpose in turn shapes the company’s business concept, which is the second component of a company’s strategy. The third component of the strategy is the company’s economic objectives, which is derived from the purpose and is given a focus by the business concept. Such economic objectives are the company’s targets for profit, growth, market share, and rates of return. These authors believe that in most outstanding companies financial objectives are a means to achieving higher order, objectives. Such a purpose is founded in the context of a company’s corporate culture and basic values. Badaracco and Ellsworth are proponents of such belief, and they write:

  Just as people have many needs and goals, so do organizations. In most outstanding companies, financial objectives are viewed as a means of achieving higher, more fundamentally important, non-financial purposes. These purposes embody the company’s basic values and define the distinctive contribution it seeks to make to its owners, its employees, its customers, the communities in which it does business, and its other constituents, even its nation.31

  Conceptually this is similar to the understanding of purpose and its relation to key objectives as used in this book.

  Some business authors such as Andrew Campbell and Laura L. Nash believe that individuals in organizations are searching for a sense of purpose and a sense of identity, something that they call a “sense of mission”. According to them, individuals want more from their organization than pay, security, and the opportunity to develop their skills. They want a cause that is personally satisfying. These writers argue that mission is strategy-based and also culture-based. Accordingly, a mission exists when strategy and cultural values are mutually supportive.

  Campbell and Nash incorporate purpose, strategy, values, and behavioral standards into corporate mission. Purpose is defined through answering “Why do I exist and, for whose benefit are all the efforts being made?” Strategy is defined by what business the company will compete in and the distinctive competence or competitive advantage that the company has or plans to have. Values are the beliefs and moral principles that lie behind a company’s culture. Finally, standards and behavior are the culmination of purpose, strategy and values that establish the norm of action and behavior guidelines, policy and procedures that help the employees to decide what to do daily.32

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  Strategic Marketing Management

  • Richard M.S. Wilson, Colin Gilligan(Authors)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  This process of moving from the general to the specific should lead to a set of objectives that are not just attainable within any budgetary or other constraints that exist, but that are also compatible with environmental conditions as well as organizational strengths and weaknesses. It follows from this that the process of setting objectives should form what is often referred to as an internally consistent and mutually reinforcing hierarchy. As an illustration of this, if we assume that corporate management is concerned first and foremost with, say, long-term profits and growth, it is these objectives that provide the framework within which the more detailed subset of operational objectives, including market expansion and product-specific increases in sales and share, are developed. Taken together, these then contribute to the achievement of the overall corporate objectives.

  It is these operational objectives that are the principal concern of those in the level below corporate management. Below this, managers are concerned with objectives that are defined even more specifically, such as creating awareness of a new product, increasing levels of distribution, and so on. This hierarchy points in turn to the interrelationship, and in some cases the confusion, that exists between corporate objectives and marketing objectives. The distinction between the two is an important one and is discussed at a later stage in this chapter. However, as a prelude to this, and indeed to the process of objectives setting, there is a need for the strategist to decide upon the business mission. We therefore begin this chapter with a discussion of the role and purpose of planning as the background against which we can more realistically examine approaches to the development of the mission statement and, subsequently, corporate and marketing objectives (see Illustration 7.1).

  Illustration 7.1 Objectives, strategies and plans

  The interrelationships between objectives, strategies and plans have been spelled out by Davidson (1987a , p. 122), who, in discussing BMW’s recovery efforts in Germany in the 1960s, made the following comments.

  BMW was on the verge of bankruptcy. It was producing motorcycles for a dwindling market, and making a poor return on its bubble cars and six-cylinder saloons. A takeover bid by Daimler-Benz, the makers of Mercedes, was narrowly avoided, and the group was rescued by a Bavarian investment group.

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  Strategic Management in the Arts

  • Lidia Varbanova(Author)
  • 2013(Publication Date)
  • Routledge

    (Publisher)

  Vision, Mission and Objectives

  LEARNING OBJECTIVES

  Upon completing this chapter you should be able to:

  1. Describe the elements that make up an organisation’s identity.
  2. Understand and explain why defining an organisation’s mission (purpose) and vision is so important.
  3. Understand the three-dimensional framework for formulating objectives.
  4. Elaborate how organisational objectives can be set up using the SMART approach.
  5. Analyse the mission statements and objectives of diverse arts organisations.
  6. Elaborate the section of the strategic plan related to the mission, vision and goals of an arts organisation.
  7. Connect the theory on the strategic-thinking phase of the strategic management with practical case studies.

  1. THE IMPORTANCE OF ORGANISATIONAL IDENTITY

  The start-up phase of the strategic management process is strategic thinking, which includes formulation of the organisation’s mission statement (raison d’être, or the organisation’s purpose), vision and long-term goals.

  There is no agreed formula or common recipe on what would be a good mission statement as it is situation specific and different for every individual case. A mission statement is a unique, specific and positive message. The majority of authors place the elaboration of the mission and vision at the start of the strategic planning process, as it gives the general vector of the strategic objectives, operational activities and tasks. The following are several selected opinions of authors on strategies, in both the business and the nonprofit sectors, on what mission means and what would be the components of a mission statement:

  • Peter Drucker (1974)1

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  Mission and Business Philosophy

  • Andrew Campbell, Kiran Tawadey(Authors)
  • 2016(Publication Date)
  • Butterworth-Heinemann

    (Publisher)

  company's board of directors, owners or shareholders, and the Mission and mission statements 291 company's overall organizational decision making structure. Finally, 'values' included consideration for customers, competitors, employees, regulatory agencies and the general public. According to McGinnis (1981), a mission statement (1) should define what the organization is and what the organization aspires to be, (2) should be limited enough to exclude some ventures and broad enough to allow for creative growth, (3) should distinguish a given organization from all others, (4) should serve as a framework for evaluating both current and prospective activities, and (5) should be stated in terms sufficiently clear to be widely understood throughout the organization. King and Cleland (1979) recommend that organizations carefully develop a written mission statement for the following reasons: 1 To ensure unanimity of purpose within the organization. 2 To provide a basis, or standard, for allocating organizational resources. 3 To establish a general tone or organizational climate. 4 To serve as a focal point for individuals to identify with the organization's purpose and direction; and to deter those who cannot from participating further in the organization's activities. 5 To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization. 6 To specify organizational purposes and the translation of these purposes into objectives in such a way that cost, time, and performance parameters can be assessed and controlled. The survey A personal letter was mailed to the chief executive officers of all Business Week 1000 firms. The letter asked for a copy of the firm's mission statement. A mission statement was described in the letter as 'an enduring statement of purpose that reveals product and market information about a firm's operations'.

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  Strategic Marketing Planning

  • Richard M.S. Wilson, Colin Gilligan(Authors)
  • 2010(Publication Date)
  • Routledge

    (Publisher)

  This process of moving from the general to the specific should lead to a set of objectives that are not just attainable within any budgetary or other constraints that exist, but that are also compatible with environmental conditions as well as organizational strengths and weaknesses. It follows from this that the process of setting objectives should form what is often referred to as an internally consistent and mutually reinforcing hierarchy. As an illustration of this, if we assume that corporate management is concerned first and foremost with, say, long-term profits and growth, it is these objectives that provide the framework within which the more detailed subset of operational objectives, including market expansion and product-specific increases in sales and share, are developed. Taken together, these then contribute to the achievement of the overall corporate objectives.

  It is these operational objectives that are the principal concern of those in the level below corporate management. Below this, managers are concerned with objectives that are defined even more specifically, such as creating awareness of a new product, increasing levels of distribution, and so on. This hierarchy points in turn to the interrelationship, and in some cases the confusion, that exists between corporate objectives and marketing objectives. The distinction between the two is an important one and is discussed at a later stage in this chapter. However, as a prelude to this, and indeed to the process of objectives setting, there is a need for the strategist to decide upon the business mission. We therefore begin this chapter with a discussion of the role and purpose of planning as the background against which we can more realistically examine approaches to the development of the mission statement and, subsequently, corporate and marketing objectives.

  8.3 The Purpose Of Planning

  In discussing the nature and role of the planning process, Jackson (1975 ) comments that:

  Planning attempts to control the factors which affect the outcome of decisions; actions are guided so that success is more likely to be achieved. To plan is to decide what to do before doing it. Like methods, plans can be specially made to fit circumstances or they can be ready made for regular use in recurrent and familiar situations. In other words, a methodical approach can be custom built or ready made according to the nature of the problems involved.

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  Think Strategically

  • X. Gimbert(Author)
  • 2011(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  For an organization that is out in front, the “we will continue to be lead- ers” type of vision is equally powerful. This is an extremely strong vision, as it is effectively saying to the competition: “do whatever you like; we’ll carry on being leaders”, or in other words, “you’ll never catch up with us”. As we all know, it is even more difficult to stay at the top than it is to get to the top, so a vision of this type provides a leading organization with additional doses of motivation. By definition, when a vision is accomplished it ceases to be a vision, as it ceases to define what the company wants to become, what it wants to achieve. In fact, once achieved, what used to be the vision comes to form part of the mission, of what the company is. Sometimes companies state their mission and their vision together. We may find corporate mission statements that set forth the nature of their company’s business (mission) in conjunction with their vision of the future, 26 Think Strategically with what they want to be (vision). In such cases, these two concepts are merged into a single definition. 2.4 Objectives In the above, we have defined vision as a concept that allows the com- pany to think about what it wants to be, what it wants to attain, in the future. It is the concept that provides direction, enables it to know where it wants to go. But all this could also be said of a company’s objec- tives. Objectives also look to the future; they too enable us to think about what we want to achieve. So what is the difference between vision and objectives? Objectives have one clear difference from the vision, namely that they are quantifiable. Furthermore, they are quantifiable in two ways: time and the goal pursued. An objective always implies time. It is to be achieved in six months, or one, three or five years; it always includes a temporal component. And it always entails a specific goal to be reached.

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  10 Steps to Successful Strategic Planning

  • Susan Barksdale, Teri Lund(Authors)
  • 2023(Publication Date)
  • Association for Talent Development

    (Publisher)

  152 Stating Mission, Vision, and Values S T E P 5 mendations from your data analysis. Work with your group to identi- fy at least three but no more than five objectives that reveal the company’s purpose and its competitive advantage—why the company is more valuable than others in the same business. Ultimately, these objectives will help you measure how well the company performs. When the group has developed its mission objectives, use work- sheet 5.3 to ensure the objectives will promote value and align with the mission. To use this worksheet, list each draft mission objective Criteria for Effective Mission Statements Does Your Mission Statement Criterion Meet the Criterion? 01. It is concise and to the point. Yes  No  02. It is fewer than 100 words in length. Yes  No  03. It defines a scope on which to base Yes  No  strategy decisions. 04. It establishes why we exist. Yes  No  05. It reflects our competence. Yes  No  06. It provides focus. Yes  No  07. It gives us some degree of flexibility. Yes  No  08. [if the statement is for a unit or Yes  No  department within an organization] It is linked to or supports our organization’s mission statement. 09. It is realistic and achievable. Yes  No  10. It can be used for marketing and Yes  No  communication. WORKSHEET 5.2 and answer the questions posed in columns 2, 3,and 4. The training company’s mission and objectives that we detailed in example 5.2 are included as an illustrative sample in this worksheet. Creating a Vision Statement When the writers designated by the group to draft the mission statement and objectives have done their work, and approval for those materials has been received from management, it’s time to begin developing the vision statement. A vision statement asserts where your organization is headed or what its future will be. A vision statement usually has a life of two to four years, and it should support the mission statement and the objectives.

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  The Pursuit of New Product Development

  The Business Development Process

  • Marc Annacchino(Author)
  • 2011(Publication Date)
  • Butterworth-Heinemann

    (Publisher)

  This section is one of the most important of the three sections because it is the goal that must be set for the organization. It defines the call to action, the point in the future that the organization wants to attain. The following are the basic elements of this section and represent the basic requirements for defining the organization’s goals. Theme or mission statement development: This is an often-overused term, and is frequently invoked by senior management as the only means of reinforcement of long-term plans. Simply stated, the theme statement is the short, concise description of the business of the company and its objectives. It describes the company’s identity and role in the marketplace. Narrative of the vision: Create a detailed narrative of the vision of what you want your com-pany to be in the future. It should discuss the time frame, expected results, financial posi-tion, market position, product position, and competitive comparison. It should also outline the ownership structure at that time, and whether any changes are expected. The Business Objective 21 Category Price level in marketplace Feature/benefit Customer base Technology base Cost Market driving forces Percent of total sales Contribution to profit Life cycle stage Product 1 Product 2 Product 3 Figure 1-12. Product line analysis. Narrative of how the plan and reality will fit together: Create another narrative that weaves together all of the requirements for the future dream and the present and future operational issues. This is done for the sole purpose of outlining the plausibility of the plan and goals, and to ensure that they are consistent and compatible. Five-year product line catalog: This is an interesting and enjoyable exercise because it allows management to sculpt the future offerings of the organization by outlining the five-year product and services catalog.

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  Foundations of Strategy

  • Robert M. Grant, Judith J. Jordan, Phil Walsh(Authors)
  • 2015(Publication Date)
  • Wiley

    (Publisher)

  This dynamic concept of strategy involves establishing objec- tives for the future and determining how they will be achieved. Future objectives relate to the overall purpose of the firm ( mission), what it seeks to become ( vision), and spe- cific performance targets. How Do We Identify a Firm’s Strategy? Even if we know how to describe a firm’s strategy, where do we look to find what strat- egy a firm is pursuing? Strategy is located in three places: in the heads of the chief Figure 1.4 Corporate versus business strategy CORPORATE STRATEGY BUSINESS STRATEGY COMPETITIVE ADVANTAGE How should we compete? INDUSTRY ATTRACTIVENESS Which industries should we be in? RATE OF RETURN ABOVE THE COST OF CAPITAL How do we make money? 10 FOUNDATIONS OF STRATEGY executive, senior managers, and other members of the organization; in the top manage- ment team’s articulations of strategy in speeches and written documents; and in the deci- sions through which strategy is enacted. Only the last two are observable. While the most explicit statements of strategy—in board minutes and strategic plan- ning documents—are almost invariably confidential, most companies, public companies in particular, see value in communicating their strategy to employees, customers, inves- tors, business partners, and, inevitably, to the public at large. Researchers 13 identify a hierarchy of strategy statements. • The mission statement is the basic statement of organizational purpose; it addresses “Why we exist.” • A statement of principles or values outlines “What we believe in and how we will behave.” • The vision statement projects “What we want to be.” • The strategy statement articulates “What our competitive game plan will be.” Researchers argue that the game plan should comprise three definitive components of strat- egy: objectives; scope (where we will compete); and advantage (how we will compete).

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  Impacts of Emerging Economies and Firms on International Business

  • M. Marinov, S. Marinova, M. Marinov, S. Marinova(Authors)
  • 2012(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  82 The Existence, Quality, Focus, and Antecedents of Corporate Vision and Mission responses to the same environment depended on their own characteristics, the pressures they experienced, and their positions in the overall institu- tional environment. Tolbert and Zucker (1983) analyzed the institutional reform of the civil service between the nineteenth and twentieth century and found that states with a larger scale and a higher proportion of immi- gration were more likely to adopt the civil service reform in the initial reform period. In studying the antecedents of organizations’ innovations, numerous researchers found that organizational size (Dobbin et al., 1988; Edelman, 1992; Greening and Gray, 1994) and whether the organization was run by or in close contact with the public sector (Casile and Davis-Blake, 2002; Dobbin et al., 1988; Edelman, 1992) influenced whether or not certain organizational innovations were accepted. Vision elaborates the firm’s ultimate aim, clearly defining what it is in the future (Lipton, 2003). Meanwhile, mission answers three questions: ‘Who are we? Who should we be? Who will we be in the future?’ (Drucker, 1974). Vision and mission statements are derived from Western manage- ment theories. The importance of corporate vision and mission began to be recognized by Chinese firms in the 1990s, and was subsequently and gradually adopted by an increasing number of Chinese enterprises. From the perspective of institutional theory, large companies had more resources and higher capability, higher internal functions, and were more sensitive to the changing environments (Scott, 2001). At the same time, the larger the company, the greater the need to define the company’s business boundary, in order to allocate limited resources in the most appropriate way, namely, the need for a clear vision and mission to avoid undirected diversifica- tion. Thus larger companies are more inclined to define vision and mission statements.

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