STRATEGIC MANAGEMENT (BUS 412)

NOTES COMPILED

BY

DR. REUEL J. DAKUNG

DEPARTMENT OF BUSINESS ADMINISTRATION,
UNIVERSITY OF JOS
dakungr@unijos.edu.ng

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MISSIONING & VISIONING / REMISSIONING & REVISIONING
Whether a company starts from scratch developing a new business or reformulating direction for
an ongoing business, it must determine the basic goals and philosophies that shape its strategic
direction. Whether an organization is working out a new strategy or reformulating an old one, it
must decide its basic goals and philosophies. This means its fundamental purpose that sets it
apart from other companies and identifies its scope of operations in product and market terms
can be called its company mission (Pearce and Robinson, 2003). Organizations that do not pause
to think through their raison d’etre sometimes pay a heavy price. Where the mission is “blurred”
or “creeped”, a new one must be created (Goldsmith, 1995). To give a sense of direction to
people in the organization, strategic management advises the drafting of a mission statement.
According to Drucker (1990: 3-8), such declarations of principle are just as important in non-
profit organizations. The operating hypothesis is that, barring a consensus on fundamental ideals
and what the organization is trying to do, resources are likely to be wasted. Because people are
more apt to commit to the mission statement when they participate in making it or reviewing it,
their input ought to be sought. A mission statement is a massage expected to be inclusive of
expectations of all stakeholders.

STRATEGIC MISSION
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.
Drucker has the following to say about mission statements: A business mission is the foundation
for priorities, strategies, plans, and work assignments. It is the starting point for the design of
managerial jobs and, above all, for the design of managerial structures. Nothing may seem

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simpler or more obvious than to know what a company’s business is. A steel mill makes steel, a
railroad runs trains to carry freight and passengers, an insurance company underwrites fire risks,
and a bank lends money. Actually, “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. Only strategists can make sure that this question receives the
attention it deserves and that the answer makes sense and enables the business to plot its course
and set its objectives.

Basic 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 nine
components. Because a mission statement is often the most visible and public part of the
strategic-management process, it is important that it includes 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. 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?

Mission statement or the strategic mission defines company’s present business scope – “who we
are and what we do”. A mission statement must therefore include what a company’s present
products and services are, what types of customers it serves, what technological and business
capabilities it has.

The process of creating mission statement can play an important role in strategic development by
providing a vehicle to generate and screen strategic options. From there, strategy alternatives

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that do not support mission will either be discarded or given lower priority when the time comes
for detailed analysis. The mission should be conceptualized as a dynamic rather than a static
construct. Coming up with a mission statement is not as simple as it seems. And a business
mission must not be couched as making profit. Profit is more an objective and result of what a
company does. A strategically revealing mission statement must have three elements:
 Customer needs, or what is being satisfied
 Customer groups, or who is being satisfied
 The company’s activities, technologies and competencies, or how the company goes
about creating and delivering value to customers and satisfying their needs.

STRATEGIC VISION
A strategic vision is one of the tasks to be handled very early in the strategy – making process.
Remember the questions posed earlier on vision statement? A strategic vision is reflection of
management’s aspirations for the organization, its business, giving a panoramic view of “where
we are going”, and giving specifics about its future business plans. Drawing this kind of
carefully reasoned conclusion about the company means managers have taken a hard look at the
company’s external environment and have a sense of whether and how its present business needs
will change over the immediate future and beyond. A clear entrepreneurially astute strategic
vision is a prerequisite to effective strategic leadership. Managers cannot function effectively
either as leaders/ strategy makers without a future oriented concept of the business- what
customers’ needs to work towards satisfying, what business activities to pursue, what kind of
long term market position to build vis- a -vis competitors, what kind of company to try to create.
A mission statement highlighting the boundaries of a company’s present business is a logical
vantage point from which to look down the road, decide what the enterprise’s business make up
will be and charting a strategic path for it to take. The following questions must be answered
effectively for a vision to be formed:
 What changes are occurring in the market we operate in and what implications do these
have for the direction in which we need to move?
 What new/different customer needs should we be moving to satisfy?
 What new/different buyer segments should we be concentrating on?
 What new geographic or product- markets should we be pursuing?

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  What should the company’s business make up look like in 5 years?
 What kind of company should we be trying to be?
Vision statement or the strategic vision confronts managers with questions such as- where should
the company be headed? What should its future technology – product- customer focus be? What
kind of enterprise do we want to become? What industry standing do we want to achieve in 5
(five) years, for instance?

Once formulated a strategic vision must be communicated down the line to lower level managers
and employees. People must believe it, the vision must be very vivid to employees in their heads
and even evoke emotion and excitement. Executives must breakdown resistance to a new
strategic vision, and put the vision statement in writing.

SAMPLE MISSION/ VISION STATEMENTS

GlaxoSmithKline Nig PLC
S/intent- To become the indisputable leader in our industry
Mission- “Our global interest is to improve the quality of human life by enabling
people to do more, feel better and live longer”
Core Values Integrity, passion, innovation, performance, enthusiasm of the
entrepreneur and great sense of urgency.
Our Spirit we undertake our guest with enthusiasm of entrepreneurs, excited by
constant search for innovation. We value performance achieved with
integrity. We will attain success as a world class leader with each and
every one of our people contributing with passion and an unmatched sense
of urgency.
UAC OF NIGERIA PLC-1879
Slogan- “doing good”
Food focused conglomerate
ecame UAC in 1955
MISSION
To experience the thrill of adding value to lives and business by being a superior convenience
provider
VISION

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To be number one in our chosen markets providing exceptional value to our customers
SHARED VALUES
 Customer focus
 Respect for the…
 Integrity
 Team spirit
 Innervations
 Openness and communication

Julius Berger Niger, PLC

MISSION
 To offer innovative and cost effective solutions to our clients including conceptual ideas,
engineering design, procurement, construction and long term maintenance.
 To sustain our reputation for extremely short construction schedules and quality
performance in accordance with international standards achieved by a continuously
trained and skilled Nigerian workforce and a fleet of modern construction and
maintenance equipment.
 To be committed to the observance of all health safety and environment requirements in
accordance with international practice
 To execute our work based on partnerships with communities, clients, suppliers and our
own people
 To be the most capable and trustworthy indigenous multi-service construction company
in Nigeria, for the benefit of the nation

VISION
 To develop long lasting cooperation in a spirit of partnership with our clients by adding
value in fulfilling their objectives based on our performance

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FACTORS AFFECTING/GUIDING A STRATEGIC MISSION/VISION
Before the mission
Before the mission, the beliefs, desires, values and aspirations of the strategic manager must be
ascertained, because these affect the way the enterprise is run. A company’s leader should
provide a vision of what the company stands for, the mission it seeks to fulfill, and the values
that will guide the means to achieve its mission. Values represent the strong enduring beliefs and
tenets the company holds dear and help distinguish it from other companies e.g tell the truth,
keep promises, be fair, or respect individuals.

Company goals: survival, growth, profitability

Three economic goals that guide the strategic direction of a business whether stated explicitly or
not are securing survival through growth and profitability. Survival must feature in the strategic
decision making process. Profitability (over the long term) goes hand in hand with the
company’s growth. Growth must therefore be broadly defined.

Company philosophy
Also called the company creed, often appears in some mission statements. This reflects/specifies
the basic beliefs, values, aspirations and philosophical priorities the strategic decision makers are
committed to in managing the company. This often develops into an unwritten code that governs
business actions and permits them to be self-regulated.

Public image
These are the qualities that customers attribute to a business e.g safe products, quality products.
Mission statements should include such public’s expectations, because this makes achievement
of such goals more likely.

Company self-concept

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Assumes that a company knows itself so well (strengths and weaknesses) and can relate to its
environment. Firms can take personalities of their own which often transcend the personalities of
its members, hopefully positive self – image is what is desired.
The purpose of setting objectives is to convert managerial statements of strategic vision and
business mission into specific performance targets- results and outcomes the organization wants
to achieve. It is against set objectives that an organization’s progress is measured. The Strategic
Intent can keep a company’s objectives going. A strategic intent is exhibited when a company
unrelently pursues an ambitious strategic objective and concentrates its competitive actions and
energies on reaching such an objective. Managers must set objectives that require stretch and
disciplined effort. Where organizations face a challenge of trying to achieve bold, and aggressive
performance targets, they are pushed to be more inventive and exhibit some urgency in
improving both their financial position as well as business position. This tends to work against
complacency, or low- grade improvements in organizational performance. An objective is a
highly desirable ambition from, which a firm works, but is usually unattainable in one planning
period. Objectives must be (1) quantifiable/measurable (2) time bound/ deadlines (3) specific –
how much of what and by when. A goal on the other hand, is a milestone along the part toward
an objective; its attainment is planned within the planning period. E.g. a firm may desire to
capture and retain 50% of the soft drinks market, that’s an objective. The many steps it must
take in order to achieve this objective: e.g. new advertising campaigns, marketing research for
potential customers, improved distribution are all goals.

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.4 Profit is perceived negatively by some
employees in companies. Employees may see profit as something that they earn and management
then uses and even gives away to shareholders. Although this perception is undesired and
disturbing to management, it clearly indicates that both profit and vision are needed to motivate a
workforce effectively. When employees and managers together shape or fashion the vision and

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mission statements for a firm, the resultant documents can reflect the personal visions that
managers 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 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 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. 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 develop a videotape to explain the statements, and how they were developed.

Importance (Benefits) of Vision and Mission Statements

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The importance (benefits) of vision and mission statements to effective strategic management is
well documented in the literature, although research results are mixed. Rarick and Vitton found
that firms with a formalized mission statement have twice the average return on shareholders’
equity than those firms without a formalized mission statement have. The extent of manager and
employee involvement in developing vision and mission statements can make a difference in
business success. 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 ensure unanimity of purpose within the organization

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

3. To establish a general tone or organizational climate

4. 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

5. To facilitate the translation of objectives into a work structure involving the assignment

of tasks to responsible elements within the organization

6. 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.

LONG-TERM OBJECTIVES
Short term objectives are rarely the best approach to achieving sustained corporate growth and
profitability, this is accomplished through long term objectives which must cover at least seven
areas:
 Profitability: profit e.g. earnings per share or return on equity
 Productivity: improving input-output relationship e.g. units produced or costs decreased/
saved
 Competitive position: relative dominance in the marketplace

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  Employee development- employee development objectives for the long run
 Employee relations- objectives to improve employee relations e.g. safety programmes;
worker representation; etc
 Technological leadership; whether to lead or follow which would each require a different
strategic posture
 Public responsibility: to customers, society at large. Firms must seek to exceed
government requirements in the matters.

QUALITIES OF LONG-TERM OBJECTIVES

According to Pearce and Robinson (2003), the qualities that distinguish good from bad or
improved chances of an objective being attained include:
 Acceptable- consistent with preferences of managers and acceptable to groups external to
the firm
 Flexible- adaptable to unforeseen/extraordinary changes in a firm’s competitive or
environmental forecasts. One way is to allow for adjustments in the levels of the
objective rather than nature.
 Measurable-what will be achieved and when it will be achieved; i.e. measurable over
time
 Motivating-people are most productive when objectives are set at motivating levels & for
specific groups-high enough to challenge but not so high as to frustrate or so low as to be
easily attained.
 Suitable-should complement what is in the mission statement. Every objective must be a
step toward attainment of overall goals
 Understandable- strategic managers at all levels must understand what is to be achieved,
and the criteria by which their performance will be evaluated.
 Achievable-objectives must be possible to achieve.
At least two kinds of objectives must be set - financial objectives and strategic objectives.
Financial objectives include earnings growth, return on investment (economic value added),
dividend growth, stock price appreciation, good cash flow, diversified revenue base and credit
worthiness. Strategic objectives include things like additional market share, overtaking key
competitors on product quality or customer service or product innovation, recognition as leader

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in technology, lower cost than competition and better e-commerce. Strategic objectives send a
message that not only will financial position improve, so will the business position. Strategic
choice is therefore simultaneous selection of long-term objectives and strategies to actualize
them

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