MGT603 Strategic Management Solved Questions from Book by David (chap 2) c

Essay Questions

103. Describe why a mission statement is so important in the strategic-management process.

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.

104. Compare and contrast vision statement with mission statement.

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.

105. Explain the process of developing a mission statement.

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.

106. King and Cleland recommend organizations carefully develop a written mission statement for six reasons. List and describe five of these reasons.

There are six reasons King and Cleland give to develop a mission statement. Students may list and describe any five of the following:
(1) to ensure unanimity of purpose within the organization,
(2) to provide a basis, or standard, for allocating organizational resources,
(3) to establish a general tone or organizational climate,
(4) to serve as a focal point for individuals to identify with the organization’s purpose and direction, and to deter those who cannot from participating further in the organization’s activities,
(5) to facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization, and
(6) to specify organizational purposes and then to translate these purposes into objectives in such a way that cost, time and performance parameters can be assessed and controlled.

107. Describe the characteristics of an effective mission statement.

The major characteristics of an effective mission statement are a declaration of attitude, a customer orientation and a declaration of social policy.

108. 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.

Student answers may vary, but could include that:
(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.

109. List and define the major components of an effective mission statement.

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.

110. Define and give an example of the self-concept component in a mission statement.

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 Zellerback is committed to leapfrogging ongoing competition within 1,000 days by unleashing the constructive and creative abilities and energies of each of its employees.”