"If you don't know where you're going, any road will take you there." These lyrics to George Harrison's song "Any Road" are as true in business as in any other walk of life. Managers must define and communicate a clear strategy if the company is to be successful. Vision and mission statements summarize a company's business strategy in a form that can be communicated and understood easily by stakeholders.
A vision statement sets out a company's long-term goals and aspirations clearly and concisely. A vision statement is intended to inspire and motivate the company's workforce by providing a picture of where the organization is heading. It also provides a reality check for managers, who can compare their strategic objectives and operational plans to the vision statement. If a planned course of action doesn't move the company toward its vision, it may need to be revised.
A mission statement defines the business sector in which a company operates and sets out its key purpose. It summarizes what the company does and why. It also sets out how the company conducts its business and identifies key stakeholders, such as shareholders, customers and employees. A mission statement helps employees understand where their contribution fits into the company's objectives. It also helps other stakeholders decide whether they want to do business with the organization.
Strategic Management Process
The development of vision and mission statements is an essential part of the strategic management process. Having clearly defined the vision and mission of the organization, managers then can set strategic objectives that are aligned with the company's long-term goals. Managers translate these strategic objectives into an operational strategy that can be implemented, monitored and evaluated. The outcome of the evaluation will determine whether any revision of the vision statement, mission statement, objectives or operational strategy is required.
Well-written vision and mission statements ensure that each element of the strategic management process is aligned to the company's long-term goals. Managers use clear and concise vision and mission statements to communicate their aspirations to stakeholders. Employees understand where to focus their efforts if they align their daily work with the vision and mission. Clear vision and mission statements allow customers, suppliers and shareholders to choose whether or not they want to do business with the company.
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