Page 43 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 3: Defining Mission, Goals and Objectives

14. A declaration of social policy: A mission statement should contain its philosophy about Notes
social responsibility including its obligations to the stakeholders and the society at large.
15. Values, beliefs and philosophy: The mission statement should lay emphasis on the values
the firm stands for; company philosophy, known as “company creed”, generally
accompanies or appears within the mission statement.

3.4 Components of a Mission Statement

Mission statements may vary in length, content, format and specificity. But most agree that an
effective mission statement must be comprehensive enough to include all the key components.
Because a mission statement is often the most visible and public part of the strategic management
process, it is important that it includes all the following essential components:
1. Basic product or service: What are the firm’s major products or services?

2. Primary markets: Where does the firm compete?
3. Principal technology: Is the firm technologically current?
4. Customers: Who are the firm’s customers?
5. Concern for survival, growth and profitability: Is the firm committed to growth and
financial soundness?
6. Company philosophy: What are the basic beliefs, values, aspirations and ethical priorities
of the firm?
7. Company self-concept: What is the firm’s distinctive competence or major competitive
advantage?

8. Concern for public image: Is the firm responsive to social, community and environmental
concerns?
9. Concern for employees: Are employers considered a valuable asset of the firm?

10. Concern for quality: Is the firm committed to highest quality ?
Products or Services, Markets and Technology

An indispensable component of the mission statement is specification of the firm’s basic product
or service, markets and technology. These three components describe the company’s activity.

Survival, Growth and Profitability

Every firm has to secure its survival through growth and profitability. These three economic
goals guide the strategic direction of almost every business organisation.
A firm that is unable to survive will be incapable of satisfying the aims of any of its stakeholders.
Profitability is the mainstay goal of a business organisation, and profit over the long term is the
clearest indication of a firm’s ability to satisfy the claims and desires of all stakeholders. A firm’s
growth is inextricably linked to its survival and profitability.

Company Philosophy

The statement of a company’s philosophy (also called company creed) generally appears within
the mission statement. It specifies the basic values, beliefs and aspirations to which the strategic
decision-makers are committed in managing the company. The company philosophy provides
a distinctive and accurate picture of the company’s managerial outlook.

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