CHAPTER 2: THE BUSINESS VISION & MISSION - PAST SEM QUESTIONS

CHAPTER 2: THE BUSINESS VISION & MISSION - PAST SEM QUESTIONS

PREPARED BY: WIRDA BINTI OSMAN (2010356463) –BMB5Bc

APRIL 2011 – PART B (QUESTION 1)

(a)    Differentiate mission statement and vision statement. (6M)

OCT 2008 – PART B (QUESTION 3)

Differentiate each of the following pair of strategic management term and explain their relations to strategic management process.

(a)    Mission – Vision (5M)

OCT 2006 – PART B (QUESTION 2)

(a)    Discuss the differences between vision and mission statements. (5M)

APRIL 2006 – PART B (QUESTION 1)

        (b)  Compare and contrast vision statement with mission statement. (6M)

Mission statement

·        Definition: An enduring statement of purpose that distinguishes one organization from other similar enterprises. It was a declaration of an organization’s “reason for being”.

·        Function: it lists the broad goals for which the organization is formed. Its prime function is internal; to define the key measure or measure of the organizations success and its prime audience is the leadership team and stockholders.

·        Answer: its answer the questions “what is our business?”.

·        Employee: it helps team to act and guides them in what they should do.

·        Change: your mission statement may change if your company outlives the industry it starts in, but it should still tie back to your core values and vision.

·        Time: A mission statement talk about the organizations present leading to its future.

·        About: A mission statement talks about how the organization will get to where it wants to be.  Defines the organization purpose and primary.

·        A mission statement concerns what an organization is all about.

·        A mission statement gives the overall purpose of an organization.

·        A mission statement explains what the organization does, for whom and the benefit.

·        A mission statement also known as creed statement, statement of purpose, statement of philosophy, statement of beliefs, statement of business principles and a statement “defining our business”.

·        E.G: Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet consumer expectations of highest quality; leading technology; competitive pricing; individual and company accountability; best-in-class service and support; flexible customization capability; superior corporate citizenship; financial stability.

Vision statement

·        Definition: An agreement on the basic vision for which the firm strives to achieve in the long term is especially important.

·        Function: It lists where the organization sees itself some years from now. For employees, it gives direction about how they are expected to behave and inspires them to give their best. It shapes customers understanding of why they should work with the organization.

·        Answer: it answer the question, “what do we want to become?”.

·        Employees: it identifies why they need to work with the organization and their differentiator.

·        Change: your vision should remain intact, even if market change dramatically because it speak to what your company represents, not just what it does.

·        Time: A vision statement talks about the organization future.

·        About: A vision statement outlines where an organization wants to be. Communicates both the purpose and values of the organization.

·        A vision statement is what the organization wants to become.

·        A vision statement, on the other hand, describes how the future will look if the organization achieves its mission.

·        A vision statement describes a picture of the "preferred future.

·        E.G: General Motors’ vision is to be the world leader in transportation products and related services.

APRIL 2011 – PART B (QUESTION 1)

(b)    Explain why mission statement is very important in strategic management process. (6M)

APRIL 2010 –PART B (QUESTION 1)

(a)    Explain (5) benefits for organizations which have a mission statement as recommended by King and Cleland. (10M)

OCT 2007 – PART B (QUESTION 3)

(a)    Discuss the important role of a mission statement in the strategic management process. (8M)

APRIL 2007 – PART (QUESTION 5)

(a)    Describe why a mission statement is so important in the strategic management process. (6M)

MARCH 2005 – PART B (QUESTION 5)

(a)    State five (5) reasons why organizations prepare mission. (11M)

·        To ensure unanimity of purpose within the organization.

·        To provide a basis, or standard, for allocating organizational resources.

·        To establish a general tone or organizational climate.

·        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.

·         To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization.

·        To specify organizational purposes and then to translate these purposes into objectives in such a way that cost, time and performance parameters can be assessed and controlled.

APRIL 2011 – PART B (QUESTION 1)

(c) Describe the characteristics of an effective mission statement. (8M)

APRIL 2010 –PART B (QUESTION 1)

(a)    Describe three (3) characteristics of a mission statement. (10M)

APRIL 2007 – PART (QUESTION 5)

(c) Describe the characteristics of an effective mission statement. (6M)

APRIL 2006 – PART B (QUESTION 1)

(c) Describe the characteristics of an effective mission statement. (6M)

MARCH 2005 – PART B (QUESTION 5)

(a)    Describe three (3) characteristics of a mission statement. (9M)

1.      A Declaration of Attitude

·        A mission statement is more than a statement of specific details: it is a declaration of attitudes and outlook.

·        It usually is broad in scope for at least 2 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.

·        Second, a mission statement needs to be broad to reconcile differences effectively among and appeal to an organization diverse stakeholders, the individuals and groups of individuals who have a special stake or claim on the company.

·        The fine balance between specify and generality is difficult to achieve, but it is well worth the effort.

·        An effective mission statement should not be too lengthy; recommended length is less than 250 words.

·        An effective mission statement should arouse positive feelings and emotions about an organization; it should be inspiring in the sense that it motivates readers to action.

·        An effective statement generates the impression that a firm is successful, has direction and is worthy of time, support and investment- from all socioeconomic group of people.

·        It reflects judgments about future growth directions and strategies that are based on forward-looking external and internal analysis.

·        A business mission should provide useful criteria for selecting among alternative strategies.

·        A clear mission statement provides a basis for generating and screening strategic option.

·        The statement of mission should be dynamic in orientation, allowing judgments about the most promising growth directions and those considered less promising.

2.      A Customer Orientation – Vern McGinnis

·        A good mission statement describes an organizations purpose, customers, products or services, markets, philosophy and basic technology.

·        A mission statement should:

1.      Define what the organization is and what the organization aspires to be.

2.      Be limited enough to exclude some venture and broad enough to allow for creative growth.

3.      Distinguish a given organization from others.

4.      Serve as a framework for evaluating both current and prospective activities.

5.      Be stated in terms sufficiently clear to be widely understood throughout the organization.

·        A good mission statement reflects 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.

·        Good mission statements identify the utility of a firm’s product to its customers.

3.      Mission Components

·        Mission statement can and do vary in length, content, format and specify.

·        Most practitioners and academicians of strategic management feel that an effective statement should include 9 components.

·        Because a mission statement is often the most visible and public part of the strategic management process. It is important that is includes the 9 characteristic.

1.      Customers –who are the firm’s customers?

2.      Product 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.      Concern for 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 – what is the firm’s distinctive competence or major competitive advantage?

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?

OCT 2009 – PART B (QUESTION 5)

Briefly explain the basic components of a good mission. (20M)

OCT 2007 – PART B (QUESTION 3)

(b)    Discuss any three (3) major components of a mission statement. (12M)

OCT 2006 – PART B (QUESTION 2)

(b)    List and briefly explain any five essential components of a mission statement. (15M)

1.      Customers – Target Consumers

·        Who are the firm’s customers?

·        An effective mission statement sets out, in broad terms, the target market. A manufacturer that makes nuts and bolts might set its target market as retail hardware stores, machine manufacturers, or both.

·        E.g: We believe our first responsibility is to the doctors, nurses, patients, mothers and all others who use our products and services. (Johnson & Johnson)

2.      Product or services – Function

·        What are the firm’s major products or services?

·        The mission statement needs to include some description of the function of the business. For example, "to promote industrial excellence," tells customers and employees nothing. A more effective description would be "To provide management consulting services."

·        E.g: AMAX’S principal products are molybdenum, coal, iron ore, copper, lead, zinc, petroleum and natural gas, potash, phosphates, nickel, tungsten, silver, gold and magnesium. (AMAX Engineering Company)

3.      Markets - Target Region

·        Geographically, where does the firm compete?

·        The business must determine what region it serves best and relay that information by way of the mission statement. A garage, for example, might limit its target region to the community while a magazine company might target an entire country.

·        E.g: We are dedicated to the total success of Corning Glass Works as a worldwide competitor. (Corning Glass Works)

4.      Technology

·        Is the firm technologically current?

·        For businesses that rely heavily on technology, the mission statement should include a description of the essential technology the company does or plans to employ. If nothing else, this directs purchasing agents toward the appropriate vendors for goods and services.

·        E.g: we will continually strive to meet the preferences of adult smokers by developing technologies that have the potential to reduce the health risks associated with smoking. (RJ Reynolds)

5.      Concern for survival growth and profitability – Financial Objectives

·        Is the firm committed to growth and financial soundness

·        For for-profit ventures, businesses require clear financial objectives. A start-up company might set one of its financial objectives as making an initial public offering of common stock within two years. This lets the employees and potential investors know the company intends to go public, with all of the legal and record keeping ramifications that entails.

·        E.g: to serve the worldwide need for knowledge at a fair profit by adhering, evaluating, producing and distributing valuable information in a way that benefit our customers, employees, other investors and our society. (McGraw-Hill)

6.       Philosophy – Values

·        What are the basic beliefs, values, aspirations and ethical priorities of the firm?

·        Mission statements typically include a statement of company values. Values such as customer service, efficiency and eco-consciousness often appear on lists of company values. At their best, company values should express principles the company explicitly tries to affirm in day-to-day operations.

·        E.g: our world-class leadership is dedicated to a management philosophy that holds people above profits. (Kellogg)

7.      Self-concept - Strategic Positioning

·        What is the firm’s distinctive competence or major competitive advantage?

·        Effective mission statements also include a brief description of the business's strategic position within the market. For example, the company might excel at serving residential clients and seek to maximize that strategic advantage.

·        E.g: Crown Zellerbach is committed to leapfrogging ongoing competition within 1000 days by unleashing the constructive and creative abilities and energies of each of its employees. (Crown Zellerbach)

8.      Concern for public image

·        Is the firm responsive to social, community and environmental concerns?

·        Like people, companies develop public images. Careful companies craft the public image they want to establish and lay out the major features of it in the mission statement. This helps manager’s direct employees that stray from the sanctioned public image.

·        E.g: To share the world’s obligation for the protection of the environment. (Dow Chemical)

9.      Concern for employees

·        Are employees a valuable asset of the firm?

·        Every company has a policy regarding its relationship with employees. A mission statement provides an opportunity to describe that policy in brief so employees know the essentials of where they stand.

·        E.g: To develop, recruit, motivate, reward and retain personnel of exceptional ability, character and dedication by providing good working conditions, superior leadership, and compensation on the basis of performance, an attractive benefit program, opportunity for growth and a high degree of employment security. (The Wachovia Corporation)

APR 2006 – PART B (QUESTION 1)

(a)    Explain the process of developing a mission statement. (8M)

The process of developing a mission statement:

1.      Have managers read related articles

2.      Have managers prepare a vision and mission statement for the organization.

3.      Merge the documents into one

4.      Distribute to all managers

5.      Gather feedback from managers

6.      Meet to revise the final document

A widely approach to developing a vision and mission statement is first to select several articles about these statements and ask all managers to read these as background information. Then ask managers themselves to 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 a vision and mission statement 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. Some organizations hire an outside consultant or facilitator to manage the process and help draft the language. Sometimes 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. Decision 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 develop a videotape to explain the statements and how they were developed.