View larger cover
- Strategic Management: A Competitive Advantage Approach, Concepts & Cases Plus 2014 MyManagementLab with Pearson eText -- Access Card Package, 15/E
- Fred R. David, Francis Marion University
- Forest R. David
- ISBN-10: 0133768767 • ISBN-13: 9780133768763
- Forest R. David
Downloadable Instructor Resources
Help downloading instructor resources
-
- Case Instructor Manual (Download only) for Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 15/E
- David & David
- ISBN-10: 0133455300 • ISBN-13: 9780133455304
- ©2015 • Online • Live
- More info
- Instructor's Manual (ZIP) (3.0MB)
Available for download
- ISBN-10: 0133455300 • ISBN-13: 9780133455304
-
- Instructor's Resource Manual (Download only) for Strategic Management: A Competitive Advantage Approach, Concepts & Cases, 15/E
- David & David
- ISBN-10: 0133455297 • ISBN-13: 9780133455298
- ©2015 • Online • Live
- More info
- Instructor's Manual (ZIP) (1.0MB)
Available for download
- Simulation Answer Key (XLSX) (0.1MB)
Available for download
- ISBN-10: 0133455297 • ISBN-13: 9780133455298
-
- PowerPoint Presentation (Download only) for Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 15/E
- David & David
- ISBN-10: 0133450465 • ISBN-13: 9780133450460
- ©2015 • Online • Live
- More info
- Instructor's PowerPoints (ZIP) (52.9MB)
Available for download
- ISBN-10: 0133450465 • ISBN-13: 9780133450460
-
- Test Bank (Download only) for Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 15/E
- David & David
- ISBN-10: 0133444872 • ISBN-13: 9780133444872
- ©2015 • Online • Live
- More info
- Test Item File (ZIP) (0.2MB)
Available for download
- ISBN-10: 0133444872 • ISBN-13: 9780133444872
-
- TestGen® Computerized Test Bank for Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 15/E
- David & David
- ISBN-10: 0133444910 • ISBN-13: 9780133444919
- ©2015 • Online • Live
- More info
- Please note:This testbank file must be used in conjunction with Pearson's TestGen application. Go to the TestGen website to download software, upgrade, and access "getting started" TestGen resources.
- TestGen Testbank file - PC (ZIP) (1.4MB)
Compressed file for TestGen version 7.4. TestGen test software is required. Download the latest version by clicking on the "Help downloading Instructor Resources" link
- TestGen Testbank file - MAC (SIT) (1.1MB)
Compressed file for TestGen version 7.4. TestGen test software is required. Download the latest version by clicking on the "Help downloading Instructor Resources" link
- TestGen Testbank - Blackboard 9 TIF (ZIP) (0.3MB)
Click here for installation and file use instructions
- TestGen Testbank - Blackboard CE/Vista (WebCT) TIF (ZIP) (0.2MB)
Click here for installation and file use instructions. Compatible with Vista and all currently supported versions of Campus Edition
- Angel TestGen Conversion (ZIP) (0.5MB)
Test bank questions for import into Angel courses. Click here for installation and file use instructions
- Desire2Learn TestGen Conversion (ZIP) (0.3MB)
Test bank questions for import into D2L courses. Click here for installation and file use instructions
- Moodle TestGen Conversion (ZIP) (0.2MB)
Test bank questions for import into Moodle courses. Click here for installation and file use instructions
- Sakai TestGen Conversion (ZIP) (0.3MB)
Test bank questions for import into Sakai courses
- ISBN-10: 0133444910 • ISBN-13: 9780133444919
Chapter 2 - Business Vision and Mission
Overview
Chapter 2 describes the nature and role of vision and mission statements in strategic planning, and provides specific guidelines on how to develop these statements. Both characteristics and components that should be included in these statements are provided, as are numerous examples. In this course, students should become proficient devising and improving vision and mission statement documents, and this chapter provides the foundation for that knowledge.
Learning Objectives:
1. Describe the nature and role of vision and mission statements in strategic management.
2. Discuss why the process of developing a mission statement is as important as the resulting document.
3. Identify the components of mission statements.
4. Discuss how clear vision and mission statements can benefit other strategic-management activities.
5. Evaluate mission statements of different organizations.
Teaching Tips
1. Use the following two quotes in this chapter to discuss the importance of vision/mission statements in strategic management, one quote near the beginning of the chapter and the other ends the chapter. Near the beginning of the chapter: 1) “You are never going to get anyone to charge the machine guns only for financial objectives. It has got to be something that makes people feel better, feel a part of something.” At the end of the chapter: 2) Three people were at work on a construction site. . . . Few of us can build cathedrals, but to the extent we can see the cathedral in whatever cause we are following, the job seems more worthwhile.”
2. Emphasize that the vision and mission of a firm should be so compelling that readers should want to invest in the firm, work for the firm, be proud of the firm, respect the firm, and realize what the firm is all about. The list of characteristics in Table 2-3 is especially important.
3. Among the nine components of a mission statement, we think the most important is self concept (distinctive competence). Make sure students realize the “self concept” component is critical for revealing competitive advantage to customers, potential customers, and all stakeholders. For example for PepsiCo, why should we drink Pepsi vs. Coke and invest in PepsiCo vs. Coca-Cola, i.e., where in the mission statement of Pepsi is their self concept. The “self concept” component is much more than “what the firm thinks of itself.” See the end-of-chapter exercise that deals with the PepsiCo vision/mission.
4. Read the “Special Note to Students” at the end of this chapter and explain its importance to students.
5. Go through the end-of-chapter review questions since they apply chapter concepts. Most professors also go through all the end-of-chapter exercises for this chapter. In this way, class time is spent in a more interactive way with students, rather than straight lecture. To help ensure students’ attention, consider having Test 1 (on Chapters 1-6) and Test 2 (on Chapters 7-11) be composed of at least one half verbatim end-of-chapter review questions.
Answers to End-of-Chapter Review Questions
1. List four components and four guidelines that the J. Crew mission statement fails to exhibit. Write a new and improved mission for J. Crew.
Answer: The J. Crew mission statement given at the beginning of Chapter 2 arguably includes none of the nine components, and only one characteristic (less than 250 words) prescribed in Chapter 2. Thus, a new and improved proposed mission statement is given below.
“J. Crew is a global clothing retailer known for its cashmere cardigans, Capri pants, jeans, khakis, and Madewell women’s clothing. We use the latest technology to develop the highest quality fabrics to create leading fashion clothing for both men and women. We believe good ethics is good business and take of our employees who deliver exceptional service to our customers globally. We strive to be leading corporate citizens in all communities where we operate.”
2. Note at the www.jcrew.com website, a vision statement is not given. Write a recommended vision statement for J. Crew given their strategies.
Answer: We aspire to become the leading supplier of fashion clothing for men and women around the world.
3. Explain how a firm such as J. Crew can be doing well, but does not have an effective vision or mission statement.
Answer: There are hundreds of key management, marketing, finance, MIS, accounting, manufacturing, and economic variables that impact organizational performance, and hundreds more external variables. Thus, having or not having a vision or mission statement does not cause high performance. Research does suggest however that having a clear vision and mission statement are indicative of excellent strategic planning, which does correlate highly with organizational performance. But it is obviously possible for a firm such as J. Crew to do excellent strategic planning, without having an excellent vision and mission.
4. Some excellent nine-component mission statements consist of just two sentences. Write a two-sentence mission statement for a company of your choice.
Answer: “J. Crew is a global clothing retailer known for its cashmere cardigans, Capri pants, jeans, khakis, and Madewell women’s clothing. We use the latest technology, believe good ethics is good business, honor our employees, care for our customers, and strive to be leading corporate citizens in all communities where we operate.”
5. How do you think an organization can best align company mission with employee mission?
Answer: Through involvement, people become committed to an organization. An organization can align company mission with employee mission by including as many individuals as possible in the process of developing mission statements. The process of developing a mission statement should create an “emotional bond” and “sense of shared mission” between the organization and its employees. This is especially true in the USA, but employee involvement and participation are not utilized in countries such as Mexico because there that management practice would be viewed as showing weakness.
6. What are some different names for “mission statement,” and where will you likely find a firm’s mission statement?
Answer: A mission statement is 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 good place to look for a company’s mission statement is on the firm’s website or its annual report, but many organizations also have the statement engraved and publically visible at its stores or facilities.
7. If your company does not have a vision or mission statement, describe a good process for developing these documents.
Answer: Select several articles and/or web sites about these statements and ask all managers to read these as background information. Then, managers should prepare a vision or mission statement for the organization. A facilitator or committee 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.
8. Explain how developing a mission statement can help resolve divergent views among managers in a firm.
Answer: The question “What is our business?” can create controversy. Raising the question often reveals different opinions/views/beliefs among strategists in the organization. Individuals who have worked together for a long time may realize that they are in fundamental disagreement. Negotiation, compromise, and eventual agreement on important issues is needed in forming or revising a mission statement. Then, managers can “be on the same page” and focus on more specific strategy formulation activities.
9. Drucker says that the most important time to seriously reexamine the firm’s vision/mission is when the firm is very successful. What is this?
Answer: The most important time to ask seriously “What do we want to become?” and “What is our business?” is when a company has been successful. Success obsoletes the very behavior that achieved it, and creates new realities and different problems. A very successful firm is the target of rival firms who try to imitate, duplicate, reverse engineer their products, and take market share from the leading firms.
10. Explain why a mission statement should not include monetary amounts, numbers, percentages, ratios, goals, or objectives.
Answer: A mission statement is broad in scope for three reasons. First, it allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity. Excess specificity would limit the potential of creative growth for the organization. Second, a mission statement needs to be broad to reconcile differences among, and appeal to, an organization’s diverse stakeholders. Thus, a mission statement should be reconciliatory. Third, it is simply premature in the mission statement to reveal goals and objectives, which should be determined after the internal and external assessment, as illustrated in the comprehensive strategic planning model.
11. Discuss the meaning of the following statement: “Good mission statements identify the utility of a firm’s products to its customers.”
Answer: A good mission statement reflects the anticipations of customers. Organizations should identify customers’ needs and then provide a product or service to fulfill those needs. For example, AT&T’s mission statement focuses on communication rather than on telephones; Exxon-Mobil’s mission statement focuses on energy rather than on oil or gas; Union Pacific’s mission statement focuses on transportation rather than on railroads; and Universal Studio’s mission statement focuses on entertainment rather than on movies.
12. Distinguish between the “self-concept” and the “philosophy” components in a mission statement. Give an example of each for your university.
Answer: The self-concept component of a mission statement describes a firm’s distinctive competence or major competitive advantage. The philosophy component of a mission statement refers to the basic beliefs, values, aspirations, and ethical priorities of the firm.
Self-Concept: Overlooking the Atlantic Ocean, our college is AACSB accredited at both the BBA and MBA levels.
Philosophy: We treat all students with respect and admiration.
13. When someone or some company is “on a mission” to achieve something, many times they cannot be stopped. List three things in prioritized order that you are “on a mission” to achieve in life.
Answer: 1) To daily eat healthy. 2) To daily be a good steward of the natural environment.
3) To daily build up rather than break down people.
14. Compare and contrast vision statements with mission statements in terms of composition and importance.
Answer: 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?” Both statements are essential for firm success. The vision is one sentence, whereas the mission is several sentences, and includes nine components.
15. Do local service stations need to have written vision and mission statements? Why or why not?
Answer: Less formality and detail characterize strategic management in small businesses such as a local service station. However, local service stations are not immune to competitive pressures, changes in technology, changes in demographic factors, and resistance to change. Therefore, it is recommended that even the smallest organization develop written vision and mission statements to enhance efforts to secure bank financing and to develop good supplier, customer, and employee relationships.
16. Why do you think organizations that have a comprehensive mission statement tend to be high performers? Does having a comprehensive mission cause high performance?
Answer: Having a comprehensive mission statement does not guarantee or cause high performance. However, a comprehensive mission statement can contribute significantly to high performance, because ideally it conveys the intent and aspirations of all employees and managers who by working together achieve synergy. Having an excellent mission statement also provides a firm foundation for effective strategic planning, rather than ad hoc guessing about what actions would be best to take in the future.
17. Explain why a mission statement should not include strategies and objectives.
Answer: A mission statement should not include strategies and objectives because the statement needs to be broad in scope to effectively provide a basis for performing an external and internal audit and for generating and selecting among alternative strategies. Including specific strategies and objectives in a mission statement could reduce the level of innovative and creative thinking in an organization and jeopardize the potential for the statement to be widely accepted by all managers and employees. Acceptance of a clear mission is a prerequisite for gaining acceptance for strategies and objectives to pursue. In addition, it is simply premature in the mission to include strategies and objectives where are determined after the mission is decided upon.
18. What is your college or university’s self-concept? How would you state that in a mission statement?
Answer: Ranked #1 nationally in International Business, the Darla Moore College of Business at the University of South Carolina trains students to be knowledgeable, comfortable, and effective in business across varied country settings.
19. Explain the principal value of a vision and mission statement.
Answer: Whereas the mission statement answers the question, “What is our business?” the vision statement answers the question, “What do we want to become?” Both the vision statement and the mission statement ensure unanimity of purpose within the organization and make important statements about “who the firm is” and “what it wants to become” to outside stakeholders. The two statements provide a firm foundation for effective strategic planning. The statements provide direction and help motivate employees/managers. Table 2-3 lists ten benefits of having a clear mission statement: 1) achieve clarity of purpose among all managers and employees; 2) provide a basis for all other strategic planning activities; 3) provide direction; 4) provide a focal point for all stakeholders of the firm; 5) resolve divergent views among managers; 6) promote a sense of shared expectations among all managers and employees; 7) project a sense of worth and intent to all stakeholders; 8) project an organized, motivated organization worthy of support; 9) achieve higher organizational performance; and 10) achieve synergy among all managers and employees.
20. Why is it important for a mission statement to be reconciliatory?
Answer: A mission statement needs to be reconciliatory because the claims of a firm's various stakeholders often conflict. For example, employees desire high wages yet customers desire low prices. An effective mission statement reconciles (reduces/mitigates) major differences among key stakeholders.
21. In your opinion, what are the three most important components that should be included when writing a mission statement? Why?
Answer: All nine components described in Chapter 2 are important, but three are particularly important: 1) self concept (reveals the firm’s distinctive competence or competitive advantage), 2) philosophy (reveals that the firm is ethical in all aspects), and 3) technology (reveals that the firm is up-to-date technologically rather than being out-of-date).
22. How would the mission statements of a for-profit and a nonprofit organization differ?
Answer: The mission statements of profit versus nonprofit organizations would not differ in the characteristics or the components specified for inclusion in effective statements.
23. Write a vision and mission statement for an organization of your choice.
Answer: This is a worthwhile class exercise. Ask students to do this individually, and then exchange papers for grading. Have grading done based on inclusion of 9 components and 8 characteristics.
24. Conduct a search on the Internet with the keywords “vision statement” and “mission statement.” Find various company statements and evaluate the documents. Write a one-page, single-spaced report on your findings.
Answer: This is a worthwhile activity for students to perform as a homework assignment followed by class discussion of the assortment of statements identified.
25. Who are the major stakeholders of the bank that you do business with locally? What are the major claims of those stakeholders?
Answer: The major stakeholders of a bank include commercial customers, consumer customers, shareholders, communities, managers, and employees. Each stakeholder group relies upon the organization. Customers expect the bank to perform in a manner that protects them financially. Shareholders expect the firm to be profitable. Local communities rely upon the bank to provide jobs, credit, and to pay taxes. Employees rely upon the bank for wages and salaries.
26. List seven characteristics of a mission statement.
Answer: Table 2-4 lists eight characteristics that may be included in students’ lists: 1) it is broad in scope and does not include monetary amounts, numbers, percentages, ratios, or objectives; 2) it is less than 250 words; 3) it is inspiring; 4) it identifies the utility of a firm’s products; 5) it reveals whether the firm is socially responsible; 6) it reveals whether the firm is environmentally responsible; 7) it includes nine components (customers, products and services, markets, technology, concern for survival/growth/profits, philosophy, self-concept, concern for public image, concern for employees); and 8) it is enduring and can reconcile differences among and appeal to an organization’s diverse stakeholders.
27. List eight benefits of having a clear mission statement.
Answer: Table 2-3 lists ten benefits that may be included in students’ lists: 1) achieve clarity of purpose among all managers and employees; 2) provide a basis for all other strategic planning activities; 3) provide direction; 4) provide a focal point for all stakeholders of the firm; 5) resolve divergent views among managers; 6) promote a sense of shared expectations among all managers and employees; 7) project a sense of worth and intent to all stakeholders; 8) project an organized, motivated organization worthy of support; 9) achieve higher organizational performance; and 10) achieve synergy among all managers and employees.
28. How often do you feel a firm’s vision and mission statement should be changed?
Answer: Vision and mission statements should be evaluated on a regular basis, at least annually, to determine if they are still appropriate. Firms may wish to change the statements both in times of crisis and in times of success. The vision and mission should be modified as needed to “stay in tune” with the company and its environment. Well written statements oftentimes are not changed for 3 to 5 years.
Answers to the End-of-Chapter Assurance of
Learning Exercises
ASSURANCE OF LEARNING EXERCISE 2A:
DEVELOP AN IMPROVED J. CREW MISSION STATEMENT
ANSWER:
The mission statement components are:
1. Customers
2. Products or services
3. Markets
4. Technology
5. Concern for survival, growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees
Improved Mission Statement
A possible J. Crew mission statement is as follows:
“We sell cashmere cardigans, Capri pants, jeans, khakis, and other high quality clothing products to young professionals around the world (1, 2, 3). We strive to maximize our shareholders’ value by utilizing the latest technology to monitor consumer trends and exceed consumer expectations (5, 4). We believe in the golden rule in all that we do, strive to be exemplary citizens in all communities where we have operations (6, 8). We deeply appreciate and care for our employees (9). Quality is our highest priority. Always has been, always will be (7).”
ASSURANCE OF LEARNING EXERCISE 2B:
EVALUATE MISSION STATEMENTS
ANSWER:
Advance Auto Parts
It is the Mission of Advance Auto Parts to provide personal vehicle owners and enthusiasts with the vehicle related products and knowledge that fulfill their wants and needs at the right price. Our friendly, knowledgeable and professional staff will help inspire, educate and problem-solve for our customers.
Barnes & Noble
Our mission is to operate the best specialty retail business in America, regardless of the product we sell. Because the product we sell is books, our aspirations must be consistent with the promise and the ideals of the volumes which line our shelves. To say that our mission exists independent of the product we sell is to demean the importance and the distinction of being booksellers. As booksellers we are determined to be the very best in our business, regardless of the size, pedigree or inclinations of our competitors. We will continue to bring our industry nuances of style and approaches to bookselling, which are consistent with our evolving aspirations. Above all, we expect to be a credit to the communities we serve, a valuable resource to our customers, and a place where our dedicated booksellers can grow and prosper. Toward this end we will not only listen to our customers and booksellers but embrace the idea that the Company is at their service.
Estee Lauder
The guiding vision of The Estee Lauder Companies is "Bringing the best to everyone we touch". By "The best", we mean the best products, the best people and the best ideas. These three pillars have been the hallmarks of our Company since it was founded by Mrs. Estee Lauder in 1946. They remain the foundation upon which we continue to build our success today.
Family Dollar Stores
For Our Customers A compelling place to shop. . . by providing convenience and low prices For Our Associates A compelling place to work. . . by providing exceptional opportunities and rewards for achievement For Our Investors A compelling place to invest. . . by providing outstanding returns.
FedEx
FedEx will produce superior financial returns for shareowners by providing high value-added supply chain, transportation, business and related information services through focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx will strive to develop mutually rewarding relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards.
Ford Motor Company
We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.
Source: Based on http://www.missionstatements.com/fortune_500_mission_statements.html
Evaluation Matrix of Mission Statements–Solutions
| Components | AAuto | B&N | ELauder | FDollar | FedEx | Ford |
| Customers | Yes | Yes | Yes | Yes | Yes | |
| Products | Yes | No | Yes | Yes | Yes | |
| Markets | No | Yes | Yes | No | No | |
| Technology | Yes | No | No | No | No | |
| Concern for Survival, Growth, Profitability | No | No | No | Yes | Yes | |
| Philosophy | Yes | Yes | Yes | Yes | Yes | |
| Self-concept | Yes | Yes | Yes | Yes | Yes | |
| Concern for public image | Yes | Yes | Yes | No | Yes | |
| Concern for employees | Yes | Yes | Yes | Yes | Yes |
ASSURANCE OF LEARNING EXERCISE 2C:
WRITE A VISION AND MISSION STATEMENT FOR PEPSICO
ANSWER:
The statements will vary from student to student but should include the nine essential components of mission statements.
Sample statements are provided below.
Nine Essential Components of Mission Statements
1. Customers
2. Products
3. Markets
4. Technology
5. Concern for Survival, Growth, Profitability
6. Philosophy
7. Self-Concept
8. Concern for Public Image
9. Concern for Employees
Existing Mission – Lacks three components: Customers, Technology, and Self-Concept
PepsiCo’s mission is given on their website as follows: “To be the world's (3) premier consumer products company focused on convenient foods and beverages (2). We seek to produce financial rewards to investors (5) as we provide opportunities for growth and enrichment to our employees (9), our business partners and the communities in which we operate (8). And in everything we do, we strive for honesty, fairness and integrity (6).” (www.pepsico.com)
Improved Mission – Includes all nine components.
“To be the world's (3) premier consumer products company focused on convenient foods and beverages (2). We seek to produce financial rewards to investors (5) as we provide opportunities for growth and enrichment to our employees (9), our business partners and the communities in which we operate (8). We strive to use the latest technology (4) to deliver outstanding products at low prices (7) for our customers (1). And in everything we do, we strive for honesty, fairness and integrity (6).”
ASSURANCE OF LEARNING EXERCISE 2D:
COMPARE YOUR COLLEGE/UNIVERSITY’S VISION AND MISSION STATEMENTS TO A LEADING RIVAL INSTITUTION
ANSWER:
Key - Nine Essential Components of Mission Statements
1. Customers
2. Products
3. Markets
4. Technology
5. Concern for Survival, Growth, Profitability
6. Philosophy
7. Self-Concept
8. Concern for Public Image
9. Concern for Employees
The vision statement and mission statement for the author’s School of Business is given below:
Existing Vision Statement
The School of Business at Francis Marion University strives to provide the highest quality baccalaureate and master’s degree business programs offered at a small comprehensive university in the southeastern United States.
Existing Mission Statement
Accredited at both the graduate and undergraduate levels, the School of Business at Francis Marion University has a mission to teaching, research, and service. Nearly our entire faculty holds a doctorate in the area in which they teach. Our small classroom environment promotes interaction among students and faculty. We teach students to think logically, communicate effectively, develop an understanding and appreciation of the global business environment, and be guided by high ethical standards. Our students develop conceptual and analytical skills needed to be successful leaders in both private and public institutions. Our internship program and placement efforts actively assist students in finding meaningful jobs. Our faculty conducts research and service activities that enhance the region's economic and industrial development. Most of our undergraduate students major in management, marketing, accounting, finance, business economics, management information systems, or general business and earn a Bachelor of Business Administration degree. Other School of Business students major in economics or computer science and receive a Bachelor of Arts of Bachelor of Science degree. Our graduate students receive a Master of Business Administration degree and may become certified in Health Management. The School of Business seeks students locally and globally of all ages and ethnic backgrounds and serves them in a friendly, considerate manner.
ASSURANCE OF LEARNING EXERCISE 2E:
CONDUCT MISSION STATEMENT RESEARCH
ANSWER:
Ask students to search the websites of local businesses to see which businesses have posted their mission statements on their websites. The students could then contact one or more of these businesses and ask the questions suggested by the exercise. Encourage your students to ask the businesses why they posted their mission statement on their website.
ASSURANCE OF LEARNING EXERCISE 2F:
EVALUATE A MISSION PROPOSAL
ANSWER:
Key - Nine Essential Components of Mission Statements
1. Customers
2. Products
3. Markets
4. Technology
5. Concern for Survival, Growth, Profitability
6. Philosophy
7. Self-Concept
8. Concern for Public Image
9. Concern for Employees
Delta Air Lines’ Actual Mission Statement – Includes no components adequately
“We—Delta's employees, customers, and community partners together form a force for positive local and global change, dedicated to bettering standards of living and the environment where we and our customers live and work."
A Proposed Mission Statement for Delta Air Lines
Delta has a vested interest in employees (9), customers, shareholders, local and global environments, by promoting diversity (7), superior customer service (1), maintaining profitability (5), and continually investing in the improvement of the environment (8). We encourage positive partnerships and understand that the ability to continually progress, transform, and expand our business is vital for continued sustainability as a leader in the global airline industry (2, 3). We utilize the latest technological advancements to keep customers safe while providing great returns to our shareholders (4).
Domino’s Pizza, Inc. – 2013
Forest R. David
A. Case Abstract
Domino’s Pizza, Inc. is the second largest pizza chain in the world with operations in over 70 nations and over 10,200 stores as of March 2013. Domino’s trails only Yum Brand’s Pizza Hut in store numbers and global presence. Domino’s specializes in takeout and delivery of pizza and more recently chicken wings and sub sandwiches, but so far does not offer a dine in experience for customers. Lacking seating inside greatly reduces margins and startup costs for franchisees and allows products to be sold cheaper to more price-conscious buyers. Domino’s operates under three business segments: 1) Domestic Stores, 2) Domestic Supply Chain, and 3) International. The Domestic Supply Chain produces and/or supplies over 99 percent of all franchisee stores and accounts for over half of company- wide revenue. Founded in 1960, Domino’s is headquartered in Ann Arbor, Michigan.
B. Vision Statement (taken from stated mission)
To be the best pizza delivery company in the world.
C. Mission Statement (proposed)
At Domino’s, we are committed to providing our customers (1) around the world (3) an affordable, consistently high quality pizza, subs and chicken wings (2), with timely delivery each and every time they order (5,6,7). Our new PULSE computerized system (4) allows orders to be more streamline and accurate. The system also allows for nutritional labels to be printed and provides accurate driving directions for delivery drivers. With our new apps for mobile phones, and website platform, customers can ensure a quick and easy ordering process. We believe good ethics is good business, and strive to sponsor programs within the communities we serve (8). We hire only dedicated employees and selectively screen and train all potential franchisees (9).
1. Customers
2. Products or services
3. Markets
4. Technology
5. Concern for survival, growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees
D. External Audit
Opportunities
1. Domino’s is only serving approximately 50 percent of the international market they could possibly be serving.
2. There is a steadily growing international appetite for American fast food, and an improving global economy. Markets such as China, Russia, India, and Brazil are still relatively untapped.
3. Many customers are looking for healthier fast food options.
4. College campuses and shopping malls are often frequented by young people.
5. Over 16 percent of residents of the USA identify themselves as Hispanic.
6. Many customers in today’s climate are willing to tolerate a degree of inconvenience if they can get a better deal.
7. Small margins in the restaurant business are the reason why so many mom-and-pops fail.
8. The current landscape in the Quick Service Restaurant (QSR) business is a bimodal population distribution with a large population of bargain-minded customers seeking deals on cheap fast food options, and another population of more affluent consumers targeting middle-to-higher end restaurants.
9. Domestic stores voted to increase their advertising revenue contribution to 5.5 percent in 2011.
Threats
1. Governments potentially forcing all restaurants to label all nutrition information on the menu at the point of sale.
2. Trademark and patent protection laws are not as sophisticated in developing countries.
3. YUM Brands (parent company of Pizza Hut) revenues are over 60 percent greater than Domino’s.
4. Little Caesars was listed as the fastest growing pizza chain in 2010, with revenues up 13.6 percent over 2009, followed by Pizza Hut’s 8 percent increase and Domino’s 7.2 percent increase.
5. Many restaurants such as Wendy’s, Subway, and even Pizza Hut offer customers low calorie options on the menu.
6. Currently, there are over 925,000 fast food service locations in the USA or one for about every 330 people.
7. Barriers to entry are relatively low for the restaurant industry, but rivalry (competitiveness) among firms is exceptionally high.
8. In the QSR industry, the bargaining power of consumers is quite powerful, availability of restaurant options in most places are abundant, and consequently there is intense price competitiveness among rival firms.
9. Wild fluctuations in commodity prices, especially prices in dairy products since they cannot be locked in for long periods of time, are particularly problematic for the industry.
10. Labor is the second greatest expense in the fast food industry.
Competitive Profile Matrix
Domino’s score of 2.32 reveals a below average company with respect to Pizza Hut and Papa John’s. Over $1.5 billion in long term debt severely impacts Domino’s stockholders’ equity and financial profit.
EFE Matrix
Domino’s received an above average EFE score of 2.75 which can be attributed largely to the excellent job Domino’s has done with international expansion. Domino’s still lags competitors by not offering a healthy line of menu items.
E. Internal Audit
Strengths
1. Domino’s reached $1 billion in USA online sales in 2012 from its website, IPhone and Android apps alone, accounting for over 60% of all sales.
2. Domino’s operates stores in 70 different nations.
3. International stores grew 30% from 2009 to 2012 to total 4,835 at year end 2012.
4. Backward integrated supply chain provides over 99% of supplies for franchisee stores.
5. Domino’s enjoys large economies of scale and great brand recognition.
6. Domino’s is exclusively a delivery/take out business, reducing overhead by not offering dine in space.
7. PULSE touch screen ordering system allows for increased order accuracy and provides driving directions to drivers.
8. Domino’s Pizza markets their pizzas as having gluten-free crust.
9. Domino’s recently introduced new Artisan pizzas, and new recipes (higher quality products) for their crust, sauce and cheeses.
Weaknesses
1. While many fast food restaurants have added healthy options, Domino’s offers little with respect to healthy food options such as salads or fruit.
2. Domino’s does not produce a sustainability report or have a sustainability statement on their website.
3. Domino’s reported over $1.3 billion in negative stockholders’ equity at yearend 2012.
4. Domino’s is a relatively large company to operate under a functional type structure.
5. One large slice of hand- tossed, pepperoni pizza contains 300 calories and 12 grams of fat, and there are 8 slices in a pizza.
6. No dine in option.
7. Domino’s suffered a quality image before the launch of the new Artisan pizzas, and there is some belief there remains a residual quality problem.
Financial Ratio Analysis
| Profit Margin Percent | Domino’s | Industry | S&P 500 |
| Gross Margin | 29.87 | 31.98 | 37.55 |
| Pre-Tax Margin | 10.79 | 17.46 | 16.89 |
| Net Profit Margin | 6.7 | 11.88 | 12.42 |
| Liquidity Ratios | |||
| Debt/Equity Ratio | NA | 0.7 | 0.97 |
| Current Ratio | 1.3 | 0.7 | 1.2 |
| Quick Ratio | 1.2 | 0.6 | 0.8 |
| Profitability Ratios | |||
| Return On Equity | NA | 36.7 | 20.88 |
| Return On Assets | 23.4 | 13.4 | 7.7 |
| Return On Capital | 42.2 | 16.3 | 10.2 |
| Efficiency Ratios | |||
| Income/Employee | 11,239 | 16,959 | 129,395 |
| Revenue/Employee | 167,844 | 138,523 | 1.05 Mil |
| Receivable Turnover | 18.5 | 49.3 | 14.2 |
| Inventory Turnover | 38.1 | 93 | 13.5 |
| Asset Turnover | 3.5 | 1.1 | 0.8 |
Domino’s is a healthy company based on most of the financial ratios. However, $1.5 billion in long-term debt weighs heavily.
Net Worth Analysis (in millions)
Methods 3 and 4 are likely the best representation of company worth. Like Domino’s, Papa John’s is also heavily leveraged with long term debt.
IFE Matrix
With a score of 2.88, Domino’s is doing an above average job based on internal factors. One area of improvement would be to develop a healthy line of menu items.
F. SWOT
SO Strategies
1. Add 500 new stores over the next 3 years in China, India, and Brazil (S2, S3, O1, O2).
2. Add 500 new stores over the next 3 years in traditional European and Middle Eastern Markets (S2, S3, O1).
3. Increase advertising expenses from $40M to match Pizza Hut’s $75M over the next 3 years to market the new Artisan pizzas and other new products (S9, O9).
4. Offer 15 percent off all takeout orders (S5, S6, O6, O8).
WO Strategies
1. Create and market a new Artisan salad (W1, W5, O3).
2. Add 500 new stores over the next 3 years in traditional European and Middle Eastern Markets (W3, O1).
3. Open 10 restaurants with a dining area as a pilot study near college campuses (W6, O4).
4. Restructure by division to further capitalize on any differences in consumption preferences in international markets (W4, O1, O2).
ST Strategies
1. Hire a market research firm to determine the value in offering discounts or other marketing strategies to combat against new competitors in select markets (S1, S5, T3, T4, T5, T6, T7, T8).
2. Market to consumers more readily the healthier aspects of Domino’s pizza’s (S8, T1).
WT Strategies
1. Create and market a new Artisan salad and pizza with lower-fat cheese (W1, W5, T1, T5).
2. Offer complimentary pizza at events around the world as a means of introducing customers to the new Artisan pizza recipe (W7, T3, T4, T5).
G. SPACE Matrix
Domino’s lands in the Competitive Quadrant based mostly on 1) $1.5 billion in long term debt, 2) intense competition within the fast food industry and 3) Offering products that are generally not a healthy food choice. Domino’s should consider adding a line of salads to their menu to help move up the Y-Axis on the Space Matrix.
H. Grand Strategy Matrix
Domino’s is clearly experiencing rapid growth, especially internationally; however, their competitive position is unclear lying somewhere between Quadrant I and II. While the company has many more locations and a much better international presence than Papa John’s, Pizza Inn, and Little Caesars, the overriding debt problem is a concern. Yum Brand’s Pizza Hut still remains supreme among pizza chains. Paying off debt would be a viable strategy for Domino’s management.
I. The Internal-External (IE) Matrix
| Business Segment | Revenue 2013 | Revenue 2012 | Revenue 2011 |
| (1) Domestic Company Owned Stores | $324 | $336 | $345 |
| (2) Domestic Franchise | 195 | 187 | 173 |
| (3) Domestic Supply Chain | 942 | 928 | 876 |
| (4) International | 218 | 201 | 176 |
| TOTAL | $1,679 | $1,652 | $1,571 |
Domino’s Domestic Supply Chain segment is the true gem of all the segments. Backward integrated and serving 99% of domestic franchisees with their products is a recipe for an enduring revenue stream. While company owned stores have more revenue than either domestic or international franchises, much of Domino’s long term debt problem is associated with these stores. Finding franchisees to place into these stores would be a viable strategy for Domino’s.
J. QSPM
K. Recommendations
1. Increase advertising expenses by $35M over the next 3 years to market the new Artisan pizzas and other new products.
2. Establish new franchisees for 1000 new stores over the next 3 years; (200 in Russia, 200 in India, 200 in China, and 400 in Europe/Middle East) for a cost of $100M. (many of these connections are already established).
3. Hire a market research firm to assess the feasibility of adding new healthy options to the menu for a cost of $5 million.
Total Amount of Funds Needed = $140M
L. EPS/EBIT Analysis (in millions expect for EPS and Share Price)
Amount Needed: $140
Stock Price: $55
Shares Outstanding: 57
Interest Rate: 5%
Tax Rate: 37%
The EPS/EBIT chart reveals debt financing as the most attractive alternative for all economic conditions. However, it is unclear if Domino’s could acquire debt capital at 5%, given the firm’s current $1.5 billion of long- term debt on the 2013 balance sheet. With the high stock price, and all recommendations (in this note) suggest having franchisees provide the capital for new stores, acquiring $140 million through equity would only increase total shares outstanding from 57 million to 59 million, so dilution of ownership is not a concern.
L. Epilogue
As of first quarter March 2013, Domino’s continues to carry $1.5 billion in long-term debt on the balance sheet resulting in over $1.3 billion in negative stockholders’ equity. Despite the continued troubles with debt, one interesting strategic change is as of March 2013. Domino’s has changed their principle strategy of delivery speed to taking extra time to produce a top-quality pizza. Down are the advertisements of yester year, promising free pizzas if not at your door in 30 minutes and in is a nation-wide marketing campaign claiming Domino’s pizzas are made fresh from never frozen dough, and it just takes a bit longer to make a better pizza. This campaign comes on the heels of Domino’s starting their Artisan Pizzas and new recipes just a few years earlier. The new buzz word/slogan for Domino’s newest marketing campaign is simply “try our Handmade Pan Pizza.”
In addition to the new Handmade Pan Pizza, Domino’s is rolling out a new $5.99 value menu that offers Penne Pastas, Stuffed Cheesy Breads, 8-piece chicken varieties, and Oven Baked Sandwiches. All of these products are in addition to the $5.99 medium two topping pizza pick-up special Domino’s has offered in recent years. With the new products (and change in pizza recipe), Domino’s is claiming through advertisements that 80 percent of their menu items are new since 2008.
Chapter 1: Domino’s Pizza
10 Basic Questions
1: A
2: C
3 C
4: B
5: A
6: D
7: C
8: B
9: C
10: C
15 Applied Questions
Porters Five Forces Model
1: D
2: B
3: A
4: B
5: D
Organizational Structure
1: A
2: C
3: D
4: D
5: A
Strategy Types
2: D
3: D
4: A
5: D
Strategic Management, 15e (David/David)
Chapter 2 The Business Vision and Mission
1) Vision and mission statements can often be found in the front of annual reports.
Answer: TRUE
Diff: 2
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
2) While vision and mission statements are part of numerous internal reports, they should never be displayed in a firm's premises.
Answer: FALSE
Diff: 2
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
3) The foundation for development of a comprehensive mission statement is provided by a clear vision.
Answer: TRUE
Diff: 1
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
4) The mission statement should be short–preferably one sentence.
Answer: FALSE
Diff: 1
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
5) When developing a vision statement, input should be received from as many managers as possible.
Answer: TRUE
Diff: 1
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
6) If an organization chooses to have both a mission and a vision, the mission statement should be established first.
Answer: FALSE
Diff: 2
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
7) According to Peter Drucker, asking the question "What is our business?" is synonymous with asking the question "What is our vision?"
Answer: FALSE
Diff: 2
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
8) A mission statement is a declaration of an organization's reason for being.
Answer: TRUE
Diff: 1
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
9) A mission statement, sometimes called a creed statement, can be defined as an enduring statement of purpose that distinguishes one organization from other similar enterprises.
Answer: TRUE
Diff: 2
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
10) Small, nonprofit organizations never develop mission statements.
Answer: FALSE
Diff: 2
AACSB: Reflective thinking
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
11) A mission statement is a declaration of an organization's financial status.
Answer: FALSE
Diff: 1
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
12) A mission statement can sometimes be called a statement of philosophy.
Answer: TRUE
Diff: 1
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
13) Carefully prepared statements of vision and mission are widely recognized as the first step in strategic management.
Answer: TRUE
Diff: 2
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
14) An important question a mission statement should answer is, "What do we want to become?"
Answer: FALSE
Diff: 2
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
15) Whereas the mission statement answers the question, "What do we want to become?" the vision statement answers the question, "What is our business?"
Answer: FALSE
Diff: 3
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
16) In order to motivate a workforce effectively, both profit and vision are needed.
Answer: TRUE
Diff: 2
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
17) When developing a mission statement, it is usually advisable to involve as few managers as possible.
Answer: FALSE
Diff: 1
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
18) The first step in the process of developing a mission statement is to ask all participants to prepare what they believe the organization's mission should be.
Answer: FALSE
Diff: 2
Objective: 2.02 Discuss why the process of developing a mission statement is as important as the resulting document.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
19) According to Campbell and Yeung, the process of developing a mission statement should create an "emotional bond" and "sense of mission" between the organization and its employees.
Answer: TRUE
Diff: 2
Objective: 2.02 Discuss why the process of developing a mission statement is as important as the resulting document.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
20) According to Campbell and Yeung, an organization's vision is associated with behavior and with the present.
Answer: FALSE
Diff: 2
Objective: 2.02 Discuss why the process of developing a mission statement is as important as the resulting document.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
21) According to King and Cleland, carefully developed and written mission statements provide a basis for organizing work, departments, activities, and segments around a common purpose.
Answer: TRUE
Diff: 1
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
22) Research has failed to find a positive relationship between mission statements and organizational performance.
Answer: FALSE
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
23) Mission statements are sometimes difficult to derive because top management may disagree over company objectives.
Answer: TRUE
Diff: 2
AACSB: Reflective thinking
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
24) According to Drucker, the most important time for a company to develop mission and vision statements is when the company is experiencing financial difficulty.
Answer: FALSE
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
25) In multidivisional organizations, each division should develop a mission statement consistent with and supportive of the corporate mission.
Answer: TRUE
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
26) One benefit of having a clear mission and vision is that it projects a sense of worth and intent to all stakeholders.
Answer: TRUE
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
27) A mission statement promotes a sense of shared expectations among all managers and employees.
Answer: TRUE
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
28) When a company has been successful the question "What is our business?" becomes unnecessary.
Answer: FALSE
Diff: 1
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
29) A mission statement is usually just a simple statement of specific details.
Answer: FALSE
Diff: 1
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
30) A mission statement should be broad enough to reconcile differences among an organization's various stakeholders.
Answer: TRUE
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
31) Stakeholders of an organization include stockholders, customers and creditors, but not competitors.
Answer: FALSE
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
32) Individuals who own stock in a corporation are considered stakeholders.
Answer: TRUE
Diff: 1
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
33) Stakeholders both affect and are affected by an organization's strategic decisions.
Answer: TRUE
Diff: 1
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
34) Mission statements cannot be stated with too high a level of specificity.
Answer: FALSE
Diff: 2
AACSB: Reflective thinking
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
35) The relative attention an organization will devote to meeting the claims of various stakeholders is indicated in a good mission statement.
Answer: TRUE
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
36) Excess specificity can stifle creativity in the formulation of an acceptable mission or purpose.
Answer: TRUE
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
37) It is unusual for the claims and concerns of a company's stakeholders to vary or conflict.
Answer: FALSE
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
38) In most cases, at least 500 words are required to effectively state a mission statement.
Answer: FALSE
Diff: 1
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
39) An effective mission statement generates the impression a firm is successful, has direction, and is worthy of time, support and investment.
Answer: TRUE
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
40) According to Vern McGinnis, an effective mission statement should define what the organization is and what the organization aspires to be.
Answer: TRUE
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
41) Having a clear mission and vision can provide a basis for a company's internal and external assessment.
Answer: TRUE
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
42) Good mission statements identify the utility of a firm's products to its customers.
Answer: TRUE
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
43) Attracting customers is a major reason for developing a mission statement.
Answer: TRUE
Diff: 1
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
44) AT&T's mission statement focuses on telephones rather than on communication.
Answer: FALSE
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
45) A mission statement that is limited enough to exclude some ventures is a poor mission statement.
Answer: FALSE
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
46) A good mission statement serves as a framework for evaluating both current and prospective activities.
Answer: TRUE
Diff: 3
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
47) The operating philosophy of organizations should be to develop a product and then try to find a market for it.
Answer: FALSE
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
48) One of the benefits of having a clear mission and vision is promoting a sense of shared expectations among all managers and employees.
Answer: TRUE
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
49) According to George Steiner, vagueness has no place in a good mission statement.
Answer: FALSE
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
50) A mission statement should be broad in scope, since concrete specification could be the base for rallying opposition.
Answer: TRUE
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
51) Union Pacific's mission statement focuses on transportation rather than on railroads because good mission statements identify the utility of a firm's products to its customers.
Answer: TRUE
Diff: 2
AACSB: Application of knowledge
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
52) The utility statement, "Do not offer me attractive looks; offer me clothes," is relevant in developing a mission statement.
Answer: FALSE
Diff: 3
AACSB: Application of knowledge
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
53) A firm's philosophy in a mission statement addresses the question, "What is the firm's distinctive competence?"
Answer: FALSE
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
54) A firm's concern for employees in a mission statement addresses the question, "Is the firm responsive to social, community, and environmental concerns?"
Answer: FALSE
Diff: 2
AACSB: Ethical understanding and reasoning
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
55) According to Peter Drucker, developing a clear business vision and mission is the first responsibility of strategists.
Answer: TRUE
Diff: 1
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
56) A sense of self-concept is one of the nine components a good mission statement should include.
Answer: TRUE
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
57) Well-conceived and properly executed mission and vision statements do not need to be subject to revision.
Answer: FALSE
Diff: 1
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
58) All of the following are mentioned as places where vision and mission statements can often be found EXCEPT
A) SEC reports.
B) annual reports.
C) customer service agreements.
D) supplier agreements.
E) business plans.
Answer: A
Diff: 2
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
59) Which statement is TRUE?
A) Companies must choose between having a mission statement or a vision statement.
B) A company can't have a mission statement unless it has a vision statement.
C) A vision statement cannot be established until a company has developed its mission statement.
D) The vision statement should be established before the mission statement.
E) Companies are required by law to have both mission and vision statements.
Answer: D
Diff: 2
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
60) Which of these basic questions should a vision statement answer?
A) What is our business?
B) Who are our employees?
C) What are our challenges?
D) What do we want to become?
E) Who are our competitors?
Answer: D
Diff: 2
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
61) Which type of statement should be created first and foremost?
A) Creed
B) Vision
C) Objectives
D) Mission
E) Competitive advantage
Answer: B
Diff: 1
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
62) The ideal length of a vision statement is
A) one page.
B) several paragraphs.
C) one sentence.
D) several sentences.
E) as long as is necessary to convey the message.
Answer: C
Diff: 1
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
63) Who is referred to as "the father of modern management"?
A) Cleland
B) Campbell
C) Drucker
D) McGinnis
E) Yeung
Answer: C
Diff: 2
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
64) What is the first step in the comprehensive strategic-management model?
A) Developing vision and mission statements
B) Performing external audits
C) Performing internal audits
D) Measuring and evaluating performance
E) Establishing long-term objectives
Answer: A
Diff: 2
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
65) According to the comprehensive strategic-management model, which step needs to be completed immediately following the establishment of long-term objectives?
A) Developing vision and mission statements
B) Performing external audits
C) Performing internal audits
D) Generating, evaluating, and selecting strategies
E) Measuring and evaluating performance
Answer: D
Diff: 2
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
66) The purpose of a mission statement is to declare all of these EXCEPT
A) a reason for being.
B) an annual financial plan.
C) a statement of purpose.
D) a statement of beliefs.
E) whom it wants to serve.
Answer: B
Diff: 2
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
67) As indicated in the strategic-management model, a clear ________ is needed before long-term objectives can be established.
A) short-term objective
B) implementation plan
C) audit policy
D) mission statement
E) evaluation strategy
Answer: D
Diff: 1
Objective: 2.02 Discuss why the process of developing a mission statement is as important as the resulting document.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
68) A business' mission is the foundation for all of the following EXCEPT
A) priorities.
B) strategies.
C) plans.
D) employee wage rates.
E) work assignments.
Answer: D
Diff: 1
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
69) According to Drucker, which question is synonymous with asking "What is our mission?"
A) What is our business?
B) How can we improve ourselves?
C) What do we want to become?
D) Who are our stakeholders?
E) How can we increase profitability?
Answer: A
Diff: 2
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
70) Which basic question should the vision statement answer?
A) What is our business?
B) How can we improve ourselves?
C) What do we want to become?
D) Who are our stakeholders?
E) How can we increase profitability?
Answer: C
Diff: 1
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
71) In the process of developing a mission statement, it is important to involve
A) as few managers as possible.
B) as many managers as possible.
C) upper-level management only.
D) lower-level management only.
E) the board of directors only.
Answer: B
Diff: 1
Objective: 2.02 Discuss why the process of developing a mission statement is as important as the resulting document.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
72) The process of developing a vision and mission statement often includes which of these as the first activity?
A) Requesting that managers modify the current document
B) Asking managers to read selected articles about mission statements
C) Asking managers to prepare a mission statement for the organization
D) Having a brainstorming session on whether the organization should have a mission statement
E) Merging several mission statements into one document
Answer: B
Diff: 2
Objective: 2.02 Discuss why the process of developing a mission statement is as important as the resulting document.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
73) After a draft mission statement has been developed, it is important to
A) ask managers to read several articles about mission statements as background information.
B) vote on the mission statement.
C) ask managers to prepare a mission statement for the organization.
D) ask managers to seek support for the mission statement from their subordinates.
E) request modifications, additions, and deletions to the mission statement.
Answer: E
Diff: 3
AACSB: Written and oral communication
Objective: 2.02 Discuss why the process of developing a mission statement is as important as the resulting document.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
74) What can be used to promote unbiased views and to manage the development of the mission statement more effectively?
A) An internal group
B) A committee of managers
C) Command-and-control
D) Surveys
E) An outside facilitator
Answer: E
Diff: 2
Objective: 2.02 Discuss why the process of developing a mission statement is as important as the resulting document.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
75) According to Campbell and Yeung, what is/are most likely associated with behavior and the present?
A) Mission
B) Values
C) Long-term objectives
D) Vision
E) Possibilities
Answer: A
Diff: 3
Objective: 2.02 Discuss why the process of developing a mission statement is as important as the resulting document.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
76) A study by Rarick and Vitton found that firms with a formalized mission statement have ________ the average return on shareholders' equity than those firms without a formalized mission statement.
A) one-quarter
B) half
C) twice
D) three times
E) five times
Answer: C
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
77) Businessweek reports that firms using mission statements have a ________ percent higher return on certain financial measures than those without such statements.
A) 10
B) 15
C) 30
D) 45
E) 50
Answer: C
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
78) Which best expresses former Colgate CEO Reuben Mark's thoughts on vision?
A) It's becoming less important that a clear mission make sense internationally.
B) It's essential to drive home different messages in different cultures.
C) Keeping the vision simple will never rally everyone to the corporate banner.
D) Pushing one vision globally is essential.
E) Elevated missions or visions will alienate international markets.
Answer: D
Diff: 2
AACSB: Diverse and multicultural work environments
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
79) When developing a mission statement, what is needed before people can focus on specific strategy formulation activities?
A) Negotiation
B) Compromise
C) Eventual agreement
D) A and B only
E) All of the above
Answer: E
Diff: 1
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
80) What is the best time to develop a mission statement?
A) When a firm is in decline
B) When the firm is successful
C) When the firm is in financial trouble
D) When the firm is in legal trouble
E) When the firm encounters competition
Answer: B
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
81) All stakeholders' claims on an organization ________ pursued with equal emphasis.
A) cannot be
B) should always be
C) are required to be
D) must ideally be
E) can usually be
Answer: A
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
82) Which group would be classified as stakeholders?
A) Governments
B) Creditors
C) Suppliers
D) Employees
E) All of the above
Answer: E
Diff: 1
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
83) All stakeholders
A) have claims and concerns about an organization, but these claims and concerns vary.
B) have the same claims and concerns about an organization.
C) have ownership rights in an organization.
D) have the same voting rights in an organization.
E) have environmental concerns as their top priority.
Answer: A
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
84) A good mission statement has
A) an employee orientation.
B) a customer orientation.
C) a shareholder orientation.
D) an environmental orientation.
E) a profit orientation.
Answer: B
Diff: 3
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
85) The potential for creative growth in an organization can be limited by
A) an overemphasis on stakeholders.
B) not enough emphasis on stakeholders.
C) a mission statement that is too general.
D) a mission statement that is too specific.
E) a mission statement that is too dynamic.
Answer: D
Diff: 1
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
86) An overly general mission statement that ________ could be dysfunctional.
A) does not exclude any strategy alternatives
B) encourages management creativity
C) excludes all diversification
D) endorses the consideration of feasible potential strategies
E) allows for the generation and consideration of a range of alternative objectives
Answer: A
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
87) The general public is especially interested in ________, whereas stockholders are more interested in ________.
A) environmental concerns; social responsibility
B) social responsibility; the treatment of employees
C) the treatment of employees; environmental concerns
D) profitability; social responsibility
E) social responsibility; profitability
Answer: E
Diff: 2
AACSB: Ethical understanding and reasoning
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
88) In order to appeal to its diverse stakeholders, an effective mission statement should be
A) inflammatory.
B) provocative.
C) contentious.
D) reconciliatory.
E) dysfunctional.
Answer: D
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
89) In developing a mission statement, arousing emotion
A) is not a benefit.
B) is futile.
C) is important.
D) should be avoided if possible.
E) is counterproductive.
Answer: C
Diff: 1
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
90) According to McGinnis, a mission statement should be all of the following EXCEPT
A) it should be broad enough to include all ventures.
B) it should be stated in clear terms.
C) it should distinguish an organization from all others.
D) it should define what an organization is.
E) it should serve as a framework for evaluating both current and prospective activities.
Answer: A
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
91) An effective mission statement does all of the following EXCEPT
A) it reflects judgments about future growth directions that are based upon forward-looking external and internal analyses.
B) it provides useful criteria for selecting among alternative strategies.
C) it provides a basis for generating and screening strategic options.
D) it is static in orientation.
E) it should be enduring.
Answer: D
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
92) Good mission statements identify the ________ of a firm's products to its customers.
A) utility
B) price
C) profit margin
D) demand
E) popularity
Answer: A
Diff: 1
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
93) Which of these examples of a mission statement's focus area does NOT identify the utility of the firm's products to its customers?
A) AT&T focuses on communication rather than telephones.
B) ExxonMobil focuses on oil and gas rather than energy.
C) Union Pacific focuses on transportation rather than railroads.
D) Universal Studios focuses on entertainment rather than movies.
E) A clothing retailer focuses on attractive looks rather than on clothes.
Answer: B
Diff: 2
AACSB: Application of knowledge
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
94) All of the following utility statements are relevant in developing a mission statement EXCEPT
A) Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking.
B) Do not offer me furniture. Offer me comfort and the quietness of a cozy place.
C) Do not offer me ideas, emotions, ambience, feelings, and benefits. Offer me things.
D) Do not offer me books. Offer me hours of pleasure and the benefit of knowledge.
E) Do not offer me a house. Offer me security, comfort, and a place that is clean and happy.
Answer: C
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
95) The recommended length of an effective mission statement is ________ words.
A) approximately 25
B) no more than 100
C) less than 250
D) at least 300
E) more than 500
Answer: C
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
96) What question is asked in conjunction with the philosophy component of a mission statement?
A) What are the firm's major products or services?
B) Is the firm committed to growth and financial soundness?
C) What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
D) Is the firm responsive to social, community, and environmental concerns?
E) Are employees a valuable asset of the firm?
Answer: C
Diff: 2
AACSB: Ethical understanding and reasoning
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
97) An effective mission statement should do all of the following EXCEPT
A) include monetary amounts, numbers, percentages and ratios.
B) be inspiring.
C) reveal that the firm is environmentally responsible.
D) identify the utility of a firm's products.
E) be reconciliatory.
Answer: A
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
98) The following excerpt from a mission statement illustrates which of the nine essential components of a mission statement?
"We believe our first responsibility is to the doctors, nurses, patients, mothers, and all others who use our products and services."
A) Markets
B) Customers
C) Concern for Employees
D) Concern for Public Image
E) Technology
Answer: B
Diff: 2
AACSB: Application of knowledge
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
99) Which of the following illustrates the self-concept component of a mission statement?
A) To earn our customer's loyalty, we listen to them, anticipate their needs, and act to create value in their eyes.
B) We are committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of our employees.
C) Our emphasis is on North American markets, although global opportunities will be explored.
D) To compensate its employees with remuneration and fringe benefits competitive with other employment opportunities in its geographical area and commensurate with their contributions toward efficient corporate operations.
E) In this respect, the company will conduct its operations prudently and will provide the profits and growth which will assure our ultimate success.
Answer: B
Diff: 3
AACSB: Application of knowledge
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
100) Effective mission statements can vary in
A) length.
B) content.
C) format.
D) specificity.
E) All of the above
Answer: E
Diff: 1
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
101) Which component of a mission statement addresses the firm's distinctive competence or major competitive advantage?
A) Technology
B) Philosophy
C) Concern for public image
D) Customers
E) Self-concept
Answer: E
Diff: 2
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
102) Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?
A) Technology
B) Philosophy
C) Concern for public image
D) Customers
E) Self-concept
Answer: B
Diff: 2
AACSB: Ethical understanding and reasoning
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
103) Which question(s) are answered in an effective mission statement?
A) Is the firm committed to growth and financial soundness?
B) Are employees a valuable asset of the firm?
C) Geographically, where does the firm compete?
D) Who are the firm's customers?
E) All of the above
Answer: E
Diff: 1
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
104) Which of the following is NOT one of the nine recommended components of a mission statement?
A) Strategies
B) Self-concept
C) Concern for employees
D) Markets
E) Customers
Answer: A
Diff: 1
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
105) Effective and carefully planned mission statements
A) require major changes every few months.
B) require major changes every few quarters.
C) require major revision every few years.
D) become ineffective in the first year.
E) stand the test of time.
Answer: E
Diff: 1
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
106) Describe why a mission statement is so important in the strategic-management process.
Answer: A clear mission statement is essential for effectively establishing objectives and formulating strategies. It reveals what an organization wants to be and whom it wants to serve. 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 for the design of managerial structures.
Diff: 1
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
107) Compare and contrast vision statements with mission statements.
Answer: 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?" When employees and managers together shape or fashion the vision and mission statements for a firm, the resultant documents can reflect the personal visions 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. 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 mission is more associated with behavior and the present.
Diff: 2
AACSB: Written and oral communication
Objective: 2.01 Describe the nature and role of vision and mission statements in strategic management.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
108) Explain the process of developing a mission statement.
Answer: A widely used approach to developing a mission statement is first to select several articles about mission statements and ask all managers to read these as background information. Then ask managers themselves to prepare a mission statement for the organization. A facilitator or committee of top managers should then merge these statements into a single document and distribute this draft mission statement to all managers. A request for modifications, additions and deletions is needed next, along with a meeting to revise the document. To the extent all managers have input into and support the final mission statement document, organizations can more easily obtain managers' support for other strategy formulation, implementation and evaluation activities.
Diff: 2
AACSB: Written and oral communication
Objective: 2.02 Discuss why the process of developing a mission statement is as important as the resulting document.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
109) King and Cleland recommend that organizations carefully develop a written mission statement for four reasons. List and describe them.
Answer: King and Cleland recommend that organizations carefully develop a written mission statement in order to reap the following benefits: 1) to make sure all employees/managers understand the firm's purpose or reason for being; 2) to provide a basis for prioritization of key internal and external factors utilized to formulate feasible strategies; 3) to provide a basis for the allocation of resources; 4) to provide a basis for organizing work, departments, activities, and segments around a common purpose.
Diff: 2
Objective: 2.04 Discuss how clear vision and mission statements can benefit other strategic-management activities.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
110) Explain what it means for a mission statement to have a customer orientation.
Answer: 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 also identify the utility of a firm's products to its customers. A major reason for developing a business mission statement is to attract customers who give meaning to an organization.
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
111) A good mission statement effectively reflects the anticipations of customers and reveals the utility that various products or services offer customers. Give three examples of this.
Answer: Student answers may vary, but could include: 1) AT&T's mission statement focuses on communication rather than on telephones; 2) Exxon's mission statement focuses on energy rather than on oil and gas; 3) Union Pacific's mission statement focuses on transportation rather than on railroads; and/or 4) Universal Studios' mission statement focuses on entertainment rather than on movies.
Diff: 2
AACSB: Application of knowledge
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
112) List and define the major components of an effective mission statement.
Answer: Students should list and define the following components of an effective mission statement: 1) customers, 2) products or services, 3) markets, 4) technology, 5) concern for survival, growth and profitability, 6) philosophy, 7) self-concept, 8) concern for public image and 9) concern for employees.
Diff: 2
AACSB: Written and oral communication
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
113) Define and give an example of the self-concept component in a mission statement.
Answer: The self-concept component of a mission statement asks the question, "What is the firm's distinctive competence or major competitive advantage?" An example of the self-concept component is, "Crown Zellerbach is committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of its employees."
Diff: 2
AACSB: Application of knowledge
Objective: 2.03 Identify the components of mission statements.
Learning Outcome: Discuss the functions of vision statements, mission statements, and long-term corporate objectives
No comments:
Post a Comment