Define your Business to Formulate a Strategy?

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 Corporation and for his 22 books and hundreds of articles. Harvard Business Review has called Drucker "the preeminent management thinker of our time."

Drucker says that asking the question "What is our business?" is synonymous with asking the question "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.
Develop Vision and Mission Statements ----» Perform External Audit ­­­­­---- » Perform Internal Audit ----» Establish Long-Term Objectives ----» Generate, Evaluate, and Select Strategies ---» Implement Strategies-Management Issues ----» Implement Strategies Marketing, Finance, Accounting, R&D, and MIS Issues ----» Measure and Evaluate Performance.

Some Strategists spend almost every moment of every day on administration and tactical concerns, and strategists who rush quickly to establish objectives and implement strategies often overlook the development of mission and mission statement. This problem is widespread even among large organizations. Many corporations in America have not yet developed a formal vision or mission statement. An increasing number of organizations are developing these statements.

Some companies develop mission statements simply because they feel it is fashionable, rather than out of any real commitment. However, as will be described in post, firms that develop and systematically revisit their vision and mission statements, treat them as living documents, and consider them to be (J&J) is an example firm. J&J managers meet regularly with employees to review, reword, and reaffirm the firm's vision and mission.

Vision versus Mission

Many organizations develop both a mission statement and a vision statement. Whereas the mission statement answers the question "What is our business," the vision statement answers the question "What do we want to become?" Many organizations have both a mission and vision statement.
It can be argued that profit, not mission or vision is the primary corporate motivator. But profit alone is not enough to motivate people. Profit is perceived negatively by some employees in companies. Employees may see profit as some thing that they earn and management then uses and even gives away to share-holders. Although this perception is undesired and disturbing to management it clearly indicates that both profit and vision are needed to effectively motivate a workforce.

When employees and managers together shape or fashion the vision and mission statements for a firm, the resultant documents can reflect the personal visions that manages and employees have in their hearts and minds about their own futures. Shared vision creates a commonality of interests that can lift workers out of the monotony of daily work and put them into a new world of opportunity and challenge.

The Process of Developing a Mission Statement

As indicated in the strategic-management model, a clear mission statement is needed before alternative strategies can be formulated and implemented. It is important to involve as many managers as possible in the process of developing a mission statement, because through involvement, people become committed to an organization.

A widely used approach to developing a mission statement is first to select several articles about mission statements and ask all managers to read theses as back-ground information. Then as managers themselves to prepare a mission statement these statements into a single document and distribute this draft mission statement to all mangers. A request for modifications, additions, and deletions is needed next, input into and support the final mission statement document, organizations can more easily obtain manager' support for other strategy formulation, implementation, and evaluation activities. Thus, the process of developing a mission statement represents a great opportunity for strategists to obtain needed support form all managers in the firm.

During the process of developing a mission statement, some organizations use discussion groups of managers to develop and modify the mission statement. 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 mission 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 mission to all managers, employees, and external constituencies of an organization are needed when the document is in final form. Some organizations even develop a videotape to explain the mission statement and how it was developed.

An article by Campbell and Yeung emphasizes that the process of developing a mission statement should create and "emotional bond" and "sense of mission" between the organization and its employees. Commitment to a company's strategy and intellectual agreement on the strategies to be pursued do not necessarily translate into an emotional bond; hence, strategies that have been formulated may not be implemented. These researchers stress that an emotional bond comes when an individual personally identifies with the underlying values and behavior of a firm, thus turning intellectual agreement and commitment to strategy into a sense of mission. Campbell and Yeung also differentiate between the terms vision and mission, saying that vision is "a possible and desirable future state of an organization" that includes specific goals, whereas missions more associated with behavior and the present.