Starter: What is a mission statement?

Mission StatementsThe mission of an organisation is its essential purpose, the mission statement is a means of communicating to key stakeholders what the company is doing and what it ought to be doing.

Why is it important to share a company’s mission statement with employees?

Why is it important for managers to think back to the mission statement when making strategic decisions?

Mission statement – Levi Strauss

People love our clothes and trust our company. We will market the most appealing

and widely worn casual clothing in the world. We

will clothe the world.

Five characteristics of a good mission statement

Contains a formulation of objectives that enables progress towards them to be measured

Differentiates the business from its competitions

Defines the markets or business in which the firm wants to operate

Is relevant to all major stakeholders - not just shareholders and managers

Excites, inspires, motivates & guides

Would these be suitable or appropriate for the businesses today?

• Microsoft: ‘A computer on every desk and in every home’ 1988

• Coca Cola: ‘Our mission is to get more people to drink Coke than water’.

Corporate aims and objectives

• Corporate aims: the long-term intentions of a business.• (Usually in the form of the mission statement)

• Corporate objectives: targets that must be achieved in order to meet the stated aims of the business.- Yardstick or decision-making and performance.- Helps co-ordinate business activities

Corporate aims and objectives

Corporate AimsThe long term targets and plans to fulfil the

mission statement

Corporate ObjectivesThe medium to long term quantifiable targets to

fulfil the mission statement

Corporate StrategyThe actions to be taken by the business to

achieve

Mission StatementThe overall reason for the business’ existence

Corporate aims

• Long term targets of a business• Tend to be qualitative

• Provides a direction for the business• Inform corporate objectives and strategies• Performance can be measured against these aims

Look at the Coca Cola web site to see how it has taken the mission statement and translated this into visions or aims.

http://www.coca-cola.co.uk/about-us/coca-cola-mission-vision-statement.html

How objectives can be usedImplement the missionProvide a clear focus for decision

makingProvide a targetMotivate employeesFacilitate control of actual

performanceProvide a criteria for evaluating

performanceReduce uncertaintyProvide a sense of unity

Strategies

"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

Planned by the board of directors’SWOT, Ansoff’s matrix and PESTLE will be used to assist

BUSS4.1 Mission, Aims and Objectives

Greggs plc - Strategies

1. Expanded from 20 shops in Newcastle to alternative location around the UK

2. Went into long-term expansion by introducing products such as sausage roles – driven the groups performance against a declining bakery market

3. Prioritises employees and customers over shareholders – Excellent customer service and motivated staff

Influences on Objectives & Policies

Owners expectations

Objectives and policies

Socialresponsibility

Businessethics

Consumer pressures

Pressuregroups

Manager’sgoals

TradeUnions

Economic Factors

LegislationEmployee expectations

Stakeholder

• Definition: • An individual or group with a direct interest in the activities and

performance of an organisation.

Who are the stakeholders?

Managers

Local community

Suppliers

The government

Customers

Employees Shareholders

Media

What are their objectives?

Shareholders objectives

• High profits• High dividends• Growth• A say in the business• A positive corporate image

Employee objectives

• High pay• Job security• Good working conditions• Fair treatment• Fringe benefits• Health and safety• Promotion prospects• Training opportunities

Customer objectives

• Low prices• Value for money• High quality products• Regular supply• Choice• Clear and accurate information

Suppliers objectives

• A long term relationship with the firm• Large size and high value of contracts• Frequent and regular order• Prompt payment• Fair prices• Growth of the firm leading to more orders

Local community objectives

• Employment prospects• Safeguarding the environment• Acceptance of social responsibility• Ethical behaviour

Government objectives

• Compliance with laws and regulations• Efficient use of resources• Employment• Contribution to the national economy• Payment of taxes

Discussion question!

• Meeting stakeholders needs – to what extent is this a win-lose or win-win situation??

• Discuss in pairs and be ready to feedback to the class.

How can stakeholders influence the decisions/ strategies made?

Public Limited Companies, whose shares are freely traded on stock exchanges and are vulnerable to takeover, place satisfying shareholders and the making of profit very high on their list of priorities. Richard Branson and the Virgin Group recognise all stakeholders and emphasise responsibility over profitability. With their activities being under increasing scrutiny to what extent do all businesses need to take the perspectives of all stakeholders into account when establishing corporate aims and objectives? Justify your answer with reference to the Virgin Group and/or other organisations that you know. (40 marks)

HW: Research 3 organisations and how they have made decisions based on the influence of their stakeholders and what impact that has had on them.