Vision and Mission Analysis

Vision Statements: What Do We Want to Become?

It is especially important for managers and executives in any organization to agree on the
basic vision that the 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. Many organizations have both a vision and
mission statement, but the vision statement should be established first and foremost. The vision
statement should be short, preferably one sentence, and as many managers as possible should have
input into developing the statement. Where there is no vision, the people perish (Proverbs 29:18).

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 from boats to bunnies. Notice here how
Starbucks’ vision statement is improved.

- Starbucks Vision Statement (paraphrased)

Starbucks strives to be the premier roaster and retailer of specialty coffee globally.

- Starbucks “Improved” Vision Statement

Starbucks’ vision is to be the most well-known, specialty coffee, tea, and pastry restaurant in the
world, offering sincere customer service, a welcoming atmosphere, and unequaled quality.

Author Comments

• The first vision statement does not state what the company wants to become. Nor does it
acknowledge the firm’s movement into specialty tea offerings. It is not as customeroriented as
needed.

• The improved vision statement reveals the company’s aspirations for the future and
acknowledges that upscale tea and pastries complement their premium coffee offerings.

Mission Statements: What Is Our Business?

 Current thought on mission statements is based largely on guidelines set forth in the mid-
1970s by Peter Drucker, who is often called “the father of modern management” for his pioneering
studies at General Motors and for his 22 books and hundreds of articles. Drucker believes that
asking the question “What is our business?” is synonymous with asking “What is our mission?”
An enduring statement of purpose that distinguishes one organization from other similar
enterprises, the mission statement is a declaration of an organization’s “reason for being.” It
answers the pivotal question “What is our business?” A clear mission statement is essential for
effectively establishing objectives and formulating strategies.

Sometimes called a creed statement, a statement of purpose, a statement of philosophy, a

statement of beliefs, a statement of business principles, or a statement “defining our business,” a
mission statement reveals what an organization wants to be and whom it wants to serve. All
organizations have a reason for being, even if strategists have not consciously transformed this
reason into writing. As illustrated with white shading in Figure 5-1, carefully prepared statements
of vision and mission are widely recognized by both practitioners and academicians as the first
step in strategic management. Drucker has the following to say about mission statements
(paraphrased):

A mission statement is the foundation for priorities, strategies, plans, and work assign
ments. It is the starting point for the design of jobs and organizational structures. Nothing
may seem simpler or more obvious than to know what a company’s business is. A lumber
mill makes lumber, an airline carries passengers and freight, and a bank lends money. But
“What is our business?” is almost always a difficult question and the right answer is usually
anything but obvious. The answer to this question is the first responsibility of strategists.

The Process of Developing Vision and Mission Statements

As indicated in the strategic-management model, clear vision and mission statements are
needed before alternative strategies can be formulated and implemented. 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 (such as those listed as Current Readings at the end of this chapter) about these
statements and ask all managers to read these as background information. Then, ask managers to
individually prepare a vision and mission statement for the organization. A facilitator or committee
of top managers should then merge these statements into a single document and distribute the draft
statements to all managers. 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 final documents, organizations can more easily obtain managers’ support for other
strategy formulation, implementation, and evaluation activities. Thus, the process of developing
vision and mission statements represents a great opportunity for strategists to obtain needed
support from all managers in the firm.

During the process of developing vision and mission statements, some organizations use
discussion groups of managers to develop and modify existing statements. Other organizations
hire an outside consultant or facilitator to manage the process and help draft the language. At times
an outside person with expertise in developing such statements, who has unbiased views, can
manage the process more effectively than an internal group or committee of managers. Decisions
on how best to communicate the vision and mission to all managers, employees, and external
constituencies of an organization are needed when the documents are in final form. Some
organizations even create a videotape to explain the statements and how they were developed.

The Importance (Benefits) of Vision and Mission Statements

The importance (benefits) of vision and mission statements to effective strategic
management is well documented in the literature, although research results are mixed. In actual
practice, wide variations exist in the nature, composition, and use of both vision and mission
statements. King and Cleland recommend that organizations carefully develop a written mission
statement in order to reap the following benefits:

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 around a
common purpose.
A Resolution of Divergent Views

Another benefit of developing a comprehensive mission statement is that divergent views

among managers can be revealed and resolved through the process. The question “What is our
business?” can create controversy. Raising the question often reveals differences among strategists
in the organization. Individuals who have worked together for a long time and who think they
know each other suddenly may realize that they are in fundamental disagreement. For example, in
a college or university, divergent views regarding the relative importance of teaching, research,
and service often are expressed during the mission statement development process. Negotiation,
compromise, and eventual agreement on important issues are needed before people can focus on
more specific strategy-formulation activities.

Characteristics of a Mission Statement

A mission statement is a declaration of attitude and outlook. It usually is broad in scope for
at least two major reasons. First, a good mission statement allows for the generation and
consideration of a range of feasible alternative objectives and strategies without unduly stifling
management creativity. Excess specificity would limit the potential of creative growth for the
organization. However, an overly general statement that does not exclude any strategy alternatives
could be dysfunctional. Apple Computer’s mission statement, for example, should not open the
possibility for diversification into pesticides—or Ford Motor Company’s into food processing.

Second, a mission statement needs to be broad to reconcile differences effectively among,

and appeal to, an organization’s diverse stakeholders, the individuals and groups of individuals
who have a special stake or claim on the company. Thus, a mission statement should be
reconciliatory. Stakeholders include employees, managers, stockholders, boards of directors,
customers, suppliers, distributors, creditors, governments (local, state, federal, and foreign),
unions, competitors, environmental groups, and the general public. Stakeholders affect and are
affected by an organization’s strategies, yet the claims and concerns of diverse constituencies vary
and often conflict. For example, the general public is especially interested in social responsibility,
whereas stockholders are more interested in profitability. Claims on any business literally may
number in the thousands, and they often include clean air, jobs, taxes, investment opportunities,
career opportunities, equal employment opportunities, employee benefits, salaries, wages, clean
water, and community services. All stakeholders’ claims on an organization cannot be pursued
with equal emphasis. A good mission statement indicates the relative attention that an organization
will devote to meeting the claims of various stakeholders.

A Customer Orientation

An effective mission statement describes an organization’s purpose, customers, products

or services, markets, philosophy, and basic technology. According to Vern McGinnis, a mission
statement should (1) define what the organization is and what the organization aspires to be, (2)
be limited enough to exclude some ventures and broad enough to allow for creative growth, (3)
distinguish a given organization from all others, (4) serve as a framework for evaluating both
current and prospective activities, and (5) be stated in terms sufficiently clear to be widely
understood throughout the organization. The mission statement should reflect the anticipations of
customers. Rather than developing a product and then trying to find a market, the operating
philosophy of organizations should be to identify customers’ needs and then provide a product or
service to fulfill those needs.

Components of a Mission Statement

Mission statements can and do vary in length, content, format, and specificity. Most
practitioners and academicians of strategic management feel that an effective statement should
include the nine mission statement components given here. Because a mission statement is often
the most visible and public part of the strategic-management process, it is important that it includes
not only the characteristics as summarized in Table 5-3 but also the following nine components:

1. 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?
Evaluating and Writing Mission Statements

There is no one best mission statement for a particular organization, so when it comes to
evaluating mission statements, good judgment is required. Ideally, the statement will provide more
than simply inclusion of a single word such as products or employees regarding a respective
component. Why? Because the statement should motivate stakeholders to action, as well as be
customer-oriented, informative, inspiring, and enduring.

Two Mission Statements Critiqued

Perhaps the best way to develop a skill for writing and evaluating mission statements is to
study actual company missions.

Five Mission Statements Revised

As additional guidance for practitioners (and students), five actual mission statements are
revised/rewritten from a customer perspective and presented in Table 5-6. The improved
statements include all nine components written from a customer perspective, and, additionally, are
inspiring, concise, and comprised of fewer than 90 words each. Regarding the “customer”
component, the new Best Buy statement refers to “individuals and businesses”; the new Lowe’s
statement refers to “homebuilders and homeowners”; and the improved Crocs statement refers to
“men, women, and children.” In contrast, the Crocs, Best Buy, Rite Aid, and Lowe’s actual
statements merely include (or not) the word customer or consumer. The statements are revised to
potentially enhance customer satisfaction, especially if communicated to customers by marketers,
and backed by company commitment to and implementation of the mission message. The proposed
statement for the footwear company Crocs, Inc., for example, talks about “dependable and lasting
comfort all day,” whereas the UPS proposed statement talks about “the most timely, dependable,
and accurate delivery times in the world.”

Two Mission Statements Proposed

The process by which mission statements are developed and the exact language/wording
included in the statement can significantly impact their effectiveness as a tool for strategic
management and marketing strategy. Firms strive to have customers exhibit an emotional bond
with the firm’s and include the nine components written from a customer perspective. The
proposed Avon statement includes the nine components in 58 words, and provides a basis for an
emotional bond to be established between the firm and its customers. For example, the Avon
statement reveals that if you purchase Avon products, you will be rewarded with “outstanding
customer service provided by a personal sales representative who adheres to the highest ethical
standards, while providing fragrances, cosmetics, and jewelry that exhibit the highest
technological advancements.” There is quite a lot in that brief statement that an Avon customer
can become loyal to, especially when the Avon marketing representative reinforces the statement
with her actions.

Chapter Summary

Every organization has a unique purpose and reason for being. This uniqueness should be
reflected in vision and mission statements. The nature of a business vision and mission can
represent either a competitive advantage or disadvantage for the firm. An organization achieves a
heightened sense of purpose when strategists, managers, and employees develop and communicate
a clear business vision and mission. Drucker says that developing a clear business vision and
mission is the “first responsibility of strategists.”

A good mission statement reveals an organization’s customers; products or services;

markets; technology; concern for survival, growth, and profitability; philosophy; self-concept;
concern for public image; and concern for employees. These nine basic components serve as a
practical frame work for evaluating and writing mission statements. As the first step in strategic
management, the vision and mission statements provide direction for all planning activities. As
indicated next in the mini-case, Citizen Holdings’ vision and mission statement is clear and
working well for the company.

Well-designed vision and mission statements are essential for formulating, implementing,
and evaluating strategy. Developing and communicating a clear business vision and mission are
the most commonly overlooked tasks in strategic management. Without clear statements of vision
and mission, a firm’s short-term actions can be counterproductive to long-term interests. Vision
and mission statements always should be subject to revision, but, if carefully prepared, they will
require infrequent major changes. Organizations usually reexamine their vision and mission
statements annually. Effective vision and mission statements stand the test of time.