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49056151-Strategic-Mgmt-ch02 - Chapter 2 Company Mission...

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Chapter 2 Company Mission 0Chapter Summary Defining the mission statement for a company is often one of the most slighted tasks in strategic management. It is much easier for many executives to emphasize operational aspects of long-term management activities rather than making sure short-term activities are in sync with the long-term goals. The principal value of the mission statement is its specification of the firm’s ultimate aims. A firm gains a heightened sense of purpose when its board of directors and its top executives address these issues: “What business are we in?” “What customers do we serve?” and “Why does this organization exist?” Ambiguous generalizations are not enough to address these questions. A firm must clearly articulate its long-term intentions if it expects its goals to serve as a basis for shared expectations, planning, and performance evaluation. A mission statement that is clearly articulated can promote a sense of shared expectations among all levels and generations of employees. It consolidates values over time and across individuals and interest groups. The firm’s sense of worth and intent can be clearly identified by outside stakeholders. Lastly, it asserts the firm’s commitment to responsible action in symbiosis with the preservation and protection of the essential claims of insider stakeholders’ survival, growth, and profitability. 0Learning Objectives 1. Describe a company mission and explain its value. 2. 0Explain why it is important for the mission statement to include the company’s basic product or service, its primary markets, and its principal technology. 3. 0Explain which goal of a company is most important: survival, profitability, or growth. 4. 0Discuss the importance of company philosophy, public image, and company self-concept to stockholders. 5. 0Give examples of the newest trends in mission statement components: customer emphasis, quality, and company vision. 6. 0Describe the role of a company’s board of directors. 7. 0Explain agency theory and its value in helping a board of directors improve corporate governance. 0Lecture Outline I0. What is a Company Mission? A0. Company mission is a broadly framed but enduring statement of a firm’s intent. It is the unique purpose that sets a company apart from others of its type and identifies the scope of its operations in product, market, and technology terms. Exhibit 2.1, Strategy in Action , gives an example of the company mission statement. 21
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10. The Need for an Explicit Mission a0) No external body requires a company to define its mission. Furthermore, defining it can be time-consuming and tedious. It contains broadly outlined objectives and strategies rather than specific directives. b0)
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49056151-Strategic-Mgmt-ch02 - Chapter 2 Company Mission...

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