Arsi University

College of Business and Economics

Department of Management

Strategic Management (MGMT 4201)

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By: Nuru Mohammed (Ph.D.)

2022/2023
Asella, Ehiopia
Nuru M. (Ph.D.)
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Chapter 2
Vision, Mission, Objectives and Goals
 Chapter Objectives:
At the end of this chapter you should be able to;
 Describe the nature and role of vision and mission statements in SM
 Evaluate/write vision and mission statements of different organizations.
 Differentiate between objective and goals.
 Understand the importance of goal and objective

Nuru M. (Ph.D.)
 “The world as we have created it is a process
of our thinking. It cannot be changed without
changing our thinking.”
― Albert Einstein

Albert Einstein: was a German-born theoretical physicist, widely acknowledged to

be one of the greatest physicists of all time. Einstein is best known for
developing the theory of relativity, but he also made important
contributions to the development of the theory of quantum mechanics

By: Nuru M. (Ph.D.)

 Continued…
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 Reflection Questions
i. Would you Share Your respective University’s Vision and Mission?
ii. What do you think is the importance?

Nuru M. (Ph.D.)
 2. Vision and Mission Analysis
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 In the beginning, a new business is simply a collection of ideas.

 When the ideas put into writing, the resulting document mirrors the
same basic ideas that underlie vision and mission statements.
 As a business grows, it is necessary to revise vision and Mission.
 Vision and mission statements often found in the;
 Annual reports.
 A firm’s premises and
 Information sent to constituencies.
 Internal reports.

Nuru M. (Ph.D.)
 2.1 Vision Statement?
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 Should answer the basic question, “What do we want to become?”
 It is a possible and desirable future state of an organization
 It provides the foundation for developing a comprehensive mission
statement.
 It should be established first and foremost.
 It should be short, preferably one sentence
 As many managers as possible should have input into development.
 At the minimum, a vision statement should reveal the type of business the
firm engages
 For many, if not most, corporations, profit rather than mission or vision is the primary
motivator
Nuru M. (Ph.D.)
 Features of a good Vision statement

 Easy to read and understand

 Compact and crisp to leave some things to people imagination
 Gives the destination and not the road map
 Excite people and make them get goose pumps.
 Provide a motivating forces even in a hard times.
 Is perceived as achievable and at the same time is challenging,
stretching, us beyond what is comfortable.

Strategic Management course, 2020/21 Set BY Dr. Habtamu Dadi

 Continued…
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Nuru M. (Ph.D.)
 2.2 Mission Statement
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 It reveals what an organization wants to be and whom it wants to serve
 It answers the question ‘What is our business?”
 is a declaration of an organization’s “reason for being.”
 It is statement of purpose that distinguishes one organization from other
similar enterprises.
 It is more associated with behavior and the present
 Also called, a statement of;
Creed (faith) or beliefs
Purpose
Philosophy
Business principles or
“Defining our business,”
 It is essential for establishing objectives and strategies
 The process of developing vision and Mission Statement
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 It involves the engagement of all top level managers .

Ask them for

Late the managers independent Distribute it the Finalize the
have background Vision and Merge statements managers and ask Mission and
information Mission for comment Vision
Statement

Figure 2.2. process of

developing vision and mission

Nuru M. (Ph.D.)
 2.3. The Importance of Vision and Mission Statement
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 There is a positive r/s b/n mission statements and measures of financial
performance.
 The benefits includes:
 To make sure all employees understand the firm’s purpose
 To provide a basis for prioritization of key internal and external factors
 To provide a basis for the allocation of resources.
 To provide a basis for organizing work
 Divergent views among managers can be revealed and resolved through the process
 Vehicles for communicating with important internal and external stakeholders.
 Characteristics of a Mission statement
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A good mission statement;
Is usually broad in scope for at least two major reasons;
 Allows for a range of feasible alternative objectives and strategies to be considered
(enables managers to be creative).
 Reconcile differences among diverse stakeholders.
Need Not be too lengthy (<150 words)
Should Arouse positive feelings and emotions about an organization.
Should be enduring.
Should Reflects judgments about future growth directions
Should Indicate the firm’s social responsibility.

N.B: Stake holders; refers individuals/groups who have a special stake or claim on the company.

Nuru M. (Ph.D.)
 Continued…
13 Customer orientation;
A mission statement must reflect the anticipations (needs) of customers
 An effective mission statement describes an organization’s;
Purpose
 Customers
Products or services
 Markets
Philosophy
Basic technology
Survival, growth/profitability
Distinctive competence (self concept)
 Public image
Employees
Nuru M. (Ph.D.)
 Continued…
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Example

Nuru M. (Ph.D.)
 2.4 A values statement
 Values are desirable qualities and beliefs that are shared among the
stakeholders of an organization.
 Values are broad beliefs about what is or is not appropriate.
 A values statement describes the principles and core beliefs that
guide the operations of the organization.
 Strong core values for an organization helps build institutional
identity, gives character to an organization, and it backs up the
mission statement.
 Organizational culture reflects the dominant value system of the
organization as a whole.
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 To define your organization’s values, executives members should

answer the following questions:
 What are the principles, standards, and actions considered
worthwhile in the organization?
 Includes how people treat each other, how groups conduct business
and what is most important to the organization?
 2.5 Defining Strategic Goals and objectives

• Internal strengths/weaknesses, coupled with external opportunities/threats and a

clear statement of vision and mission, provide the basis for establishing objectives
and strategies.

Figure 1.1A
Comprehensive
SM Model
Strategic Management course, 2020/21 Set BY Dr. Habtamu Dadi
 Continued…

 Goals:
 Statements about general aim or purpose of activities that are broad,
long range.
 Results to be achieved which describe ideal state to be achieved at
some unidentified future time
 Used primarily in policy making and general program planning.
 Provide a direction towards the attainment of mission and vision.
 Strategic goals:
 Desired outcome of addressing strategic issues.
 Each strategic goal should be a direct outcome of a strategic issue, each
of which is directly related to the organization’s mission statement.
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 Why it is important to set strategic goals for organization

1. Goals provide a sense of direction
2. Goals focus our efforts
3. Goals guide our action and decisions
4. Goals help us evaluate our progress
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 Objectives
 Defined as ends which the organization seeks to achieve by its existence and
operation.
 They indicate the specific sphere of aims, activities and accomplishments.
Objectives are the end results of planned activity
 Are how you are going to get goals
 There might be a number of objectives for a single goal.
 Are the desired future positions that it wishes to reach
 Operationalize the mission statement
 It must be SMART
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1. Specific: should be focused and detailed (clearly defined) (remove

confusion about target).
2. Measurable: should have inputs and outputs that can be identified
and measured.
 Should be stated in quantifiable and measurable terms.
3. Assignable: should be able to be broken into tasks that can be given
to specific people.
4. Realistic: should be achievable given resource and time constraints.
5. Time-bound: should have a time-frame associated with it.
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A strategic objectives:
 Summarize the specific things to be achieved to realize a strategic
goal.
 Without long-term objectives, an organization would drift aimlessly
toward some unknown end.
It is needed at the corporate, divisional, and functional levels of
an organization.
 Where goals may be fairly general, objectives are often
quantifiable/specific.
 Goal Vs. Objective

•Goals are what you aim for, what you want to obtain, objectives are the move or
plan on how to achieve the goals
•Goals are broad while objectives are narrow
•Goals are general intentions; objectives are precise
•Goals are intangible; objectives are tangible
• Goals are abstract; objectives are concrete
•Goals are more influenced by external environment than objective
•Goals express intended outcome in general terms and objectives express them in
specific terms
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 Example:
 Description: A community development organization identifies the low home-
ownership rate among area residents as a strategic issue preventing it from
achieving its vision of a vibrant, functioning and healthy community.
 Strategic goals: To increase the home-ownership rate among low- and moderate-
income residents in the neighbourhood
 Strategic Objectives:
1. Enrol 150 families in home-ownership preparation classes in the next 5Years.
2. Rehabilitate 50 vacant dwellings for sale to low- and moderate-income
households in the next 3years.
3. Construct 25 new homes and sell them to low- and moderate-income buyers
in the next 2 years.

Nuru M. (Ph.D.)
 The Benefits of Having Clear Objectives

 Provide specific direction by revealing expectations

 Allow synergy (interact/cooperation)
 Aid in evaluation by serving as standards
 Establish priorities
 Reduce uncertainty
 Minimize conflicts
 Stimulate exertion/effort
 Aid in allocation of resources
 Aid in design of jobs
 Provide basis for consistent decision making
 key areas to set goals and objectives in an organization

 Market standing: the position of an organization relative to its

competitors
 Innovation: any change made to improve methods of conducting
organizational business.
 Productivity: the level of goods or services produced by an
organization relative to the resources used in the production process.
 Resource levels: the relative amounts of various resources held by an
organization, such as inventory, equipment, and cash.
 Most organizations should set objectives indicating the relative amount
of each of these assets that should be held.
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 Profitability: the ability of an organization to earn revenue dollars

beyond the expenses necessary to generate the revenue.
 Organizations commonly have objectives indicating the level of
profitability they seek.
 Manager performance and development: the quality of managerial
performance and the rate at which managers are developing
personally.
 Worker performance and attitude: the quality of non-management
performance and such employee’s feelings about their work.
 Social responsibility: the obligation of business to help improve the
welfare of society while it strives to reach organizational objectives.
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Any Question?
Nuru M. (Ph.D.)