Mission

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ACCAStrategic Business Planning and Development

• Lecture 3
• Mission

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Learning Outcomes

• At the end of this lecture you will
• Understand some of the key terms used in
  formulating strategy
• Appreciate the influence of stakeholders
• Have been introduced to the concept of culture

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Vision

• What the business is now
• What it could be in an ideal world
• What the ideal world would look like
• However
• Can ignore real, practical problems
• Can degenerate into wishful thinking

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The Vocabulary of Strategy
TERM
DEFINITION
A PERSONAL EXAMPLE
Mission
Be healthy and look good
Overriding premise in line with the values or
expectations of stakeholders
Goal
Lose weight
General Statement of aim or purpose
Objective
Lose 10 pounds by 1 September
Quantification (if possible) or more precise
statement of the goal
So what would be a possible strategy?
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MISSION
..is likely to be concerned with the overall
purpose of the organisation, its scope and its
boundaries.It is sometimes referred to in
terms of the apparently simple, but actually
quite challenging question"What business are
we in?"
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GOAL
..a general statement of direction in line with
the mission.It may well be qualitative in
nature.
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OBJECTIVE
..is more likely to be quantified,or at least
to be a more precise statement in line with the
goal.
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A Useful Mission Statement should

• Be brief, flexible and distinctive
• Be visionary and likely to persist for a
  significant period of time
• Clarify the main purposes of the organisation,
  and the reasons why the organisation exists
• Describe the organisation's main activitiesand
  the position it wishes to attain in its industry
• Be a statement of the key values of the
  organisation - particularly regarding attitudes
  towards stakeholder groups
• Plus - The organisation should have the
  intention and capability to live up to the
  mission statement

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Elements of Mission
Purpose(why the company exists)
Strategy(competitive position,distinctive
competences)
Employee'spersonalvalues
Values(company's)
Standardsand behaviour
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Influence of Mission
Mission
Denotesvalues
Guides commercialdecisions
Culture
Strategy
Should reinforceeach other
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Mission Statements Selling Corporate Values to
Employees
LRP, Vol. 24, No.3, pp73-78, 1991
The general conclusion ... is that companies see
the mission statement primarily as a vehicle to
communicate to staff and to assert their
leadership throughout the company
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Does Your Organisation Need a Mission?
Leadership and Organisation Development, 3
(1989)
Andrew Campbell's research in the U.K. indicates
that in efficient and effective companies a good
mission statement can overcome the rivalry of
stakeholder groups.Campbell also asserts that
"leadership is more than strategy...successful
leaders also instill values in their
organisation..."The mission... has an
essential part to play in developing an
organisational culture.
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A Tool for Effective Leadership?
LRP, Vol. 24, no. 3, pp. 73-78, 1991
Promotes a sense of shared expectations among all
levels of employees, thus it is an essential
part of building a company cultureAssists the
process of managing in the interests of the
stakeholdersTo a lesser extent it
communicates a public image to important groups
outside the company
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Wal-Mart
Key Market
To offer all our fine customers in our
territories
Contribution
all of their household needs
Distinction
in a manner in which they continue to think of
us fondly.
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Otis Elevator
Key Market
To provide any customer
Contribution
with a means of moving people and things up,
down and sideways over short distances
Distinction
with higher reliability than any similar
enterprise.
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Courtyard by Marriot
Key Market
To provide economy and quality minded frequent
business travellers
Contribution
with a premier, moderate priced lodging facility
Distinction
which is consistently perceived as clean,
comfortable, staffed by friendly, attentive and
efficient people.
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Problems with Mission

• Ignored in practice
• Public relations
• Post hoc
• Full of generalisations

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Goals and Objectives

• The relevance of the mission to different
• stakeholders

Common shareholdersPreferred shareholdersTrade
creditorsHolders of debtCustomersSuppliersEmpl
oyeesPast employeesCompetitors
Immediate communityNational societyWorld
societyCorporate managementOrganisational
strategistsChief executiveBoard of
directorsGovernmentSpecial interest groups
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Stakeholders' Expectations

• Shareholders profit, ROI, increase in share
• price
• Managers salary, security, job satisfaction
• Suppliers future orders, profitable sales,
• payment
• Customers goods services, VFM, quality
• Bankers profitable relationship, security of
• assets
• Government taxation, employment, lawful
  operations, competition policy
• Public environmental impact, employment
• Pressure groups anything relevant

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Questions for Discussion

• Identify some of the groups with an interest in
  your organisations actions (i.e. the
  stakeholders)
• Where (in any organisation) might there be scope
  for a conflict between the different interests of
  different stakeholders?

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Types of Goal

• Ideological goals
• Formal goals
• Shared personal goals
• System goals
• Survival
• Efficiency
• Control
• Growth

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Commercial Goals and Objectives - Characteristics

• Specific
• Measurable
• Attainable
• Results-orientated
• Time-bounded
• Goal congruence
• Consistent vertically
• Consistent with each other
• Identify beneficiaries, nature and size of
• benefit

SMART
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Corporate Objectives

• Profitability
• Market share
• Growth
• Cash flow
• Return on capital employed
• Risk
• Customer satisfaction
• Quality
• Industrial relations
• Added value
• Earnings per share

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Primary and Secondary Objectives

• Some objectives are more important than others
• Example
• Primary objective - growth in profits
• Secondary objective - sales growth, continual
  technological innovation, superior customer
  service, product quality, efficient resource
  management, reduction of debt capital

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Setting Objectives

• Whose interests are paramount - plural
• stakeholders? Common shareholders?
• Stakeholder view - management must
• balance the objectives of the shareholders
• with those of the stakeholders
• Consensus view - objectives emerge as a
• consensus of the differing views, and are
• not all selected or controlled by
• management
• Satisfice as opposed to satisfy

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Non-Financial Goals and Objectives

• Social and ethical obligations
• Technological
• Flexibility
• Others

- products and markets- organisation structure-
productivity- expansion/consolidation
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Culture

• The sum total of the beliefs, knowledge,
  attitudes of mind and customs to which people are
  exposed in their social conditioning
• Beliefs and values
• Customs
• Artefacts
• Rituals
• Language - written and spoken, verbal and
  non-verbal

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Cultural Web

• The formal organisational structure, or the more
  informal ways in which the organisation works,
  reflect power structures and delineate important
  relationships
• The paradigm is the set of assumptions, held in
  common and taken for granted in an organisation
  which lies within the cultural web which bonds
  these assumptions to the day to day action of
  organisational life

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Cultural Influence

• The organisations founder
• The organisations history
• Leadership and management style
• Structure and systems

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The McKinsey 7-S Model

• Hard elements
• Structure
• Strategy
• Systems
• Soft elements
• Shared values
• Staff
• Style
• Skills

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The Cultural Web
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Culture and Structure

• The power culture - Zeus
• The role culture - Apollo
• The task culture - Athena
• The existential culture - Dionysus

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Culture and the Environment
Internal
External
Mission
Consistency
Stability
Change/ Flexibility
Involvement
Adaptability
Required environmental response
Organisations strategic orientation
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Culture and Risk
High Risk
Bet your company Culture
Hard macho culture
Fast feedback
Slow feedback
Work hard/Play hard culture
Process culture
Low risk
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Strategic Excellence Position

• A company cannot be good at everything, therefore
  culture must support chosen strategic excellence
  position
• Examples
• Expansion
• Speed
• Productivity
• Risk-taking