Vision and Mission Statements
- A business needs to have a ==Vision== about its future.
- A ==Vision Statement== sets out what the business wants to be in the future.
- A ==Mission Statement== sets out the overall purpose a business
Example - TCS:
TCS's Vision Statement
TCS vision is to decouple business growth and ecological footprint from its operations to address the environment bottom-line. The green approach is embedded in our internal processes and services offerings… From green buildings to green IT to a green supply chain, our mantra is to grow sustainably and help our customers achieve sustainable growth through our green solutions and service offerings.
TCS's Mission Statement
Our mission reflects the Tata Group’s longstanding commitment to providing excellence:
- To help customers achieve their business objectives by providing innovative, best-in-class consulting, IT solutions and services.
- To make it a joy for all stakeholders to work with us.
Evaluating Vision and Mission Statements :
Advantages :
- Gives the company a clear purpose and provides a sense of direction
- Guides decision-making, and unifies all people and corporates cultures within the organization in a attempt to achieve the overall vision
Disadvantages:
- Maybe just a publicity exercise but may not change the attitude of managers and employees.
- May be difficult to frame comprehensive statements which capture the complex business environment and may be time consuming.
Common Business Objectives:
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It refers to aim / target that a business wants to achieve
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Having an objective helps the business remain focused
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Businesses usually pursue multiple objectives as there are multiple stakeholder.
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Examples include :
- Profit
- Growth
- Shareholder Value
- Ethical Objectives
1. Profit:
Definition
Profit is the excess of total revenue over total cost.
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Profit represents the actual earnings of a business.
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If a business is able to make a profit , it is considered to be successful because it shows that the firm is competitive and is able to sell its products in the market.
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A loss making business cannot survive in the long run.
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One of the main objectives of the business is to maximise the profit that they earn.
2. Growth:
Definition
Growth refers to the increase in size of the business measured in terms of :
- revenue
- number of branches
- number of customer served
- asset size
Why Persue Growth ?
- To achieve lower cost of production by ecomomies of scale.
- Lenders and investors are attracted to large business.
- Comsumers have higher brand recall which leads to increased sales.
- Large companies have lesser risk of failure.
- Large firms are different to aquire.
3. Shareholder Value:
- Shareholder value refers to the value of the shareholder investment.
- Shareholders would like their investments to grow.
- In the shortrun, it refers to making the business more profitable and valuable.
- The BOD (Board of Directors) and the managers are responsible for protecting shareholder value, both in the short and the long term.
4. Ethical Objectives:
- Ethical Objectives are those based on moral principles
- If shareholders value ethics, then the business would run ethically
- Some ethical objectives could be:
- eco-freindliness
- avoiding corruption
- ethical sourcing
- fair and safe environment for employees
- Those objectives may reduce profits in the short run
Stratetgic and Tactical Objective
- A Stategy is a long term vision that involves a considerable commitment of resources. They can also be called as the “policy” to be set in place
- Tactics are short-term plans that implement the strategy. They can also be called as the “procedures” one must take
Stategic VS Tactical Objectives
| Stategic Objectives | Tactical Objectives |
|---|---|
| Planning | Doing |
| Large Scale | Smaller Scale |
| Why and What | How and Where |
| Difficult to Copy | Easier to Copy |
| Long Time Frame | Short Time Frame |
Examples:
Example 1
Stratetgic Objectives
To become the market leader in the Industry
Tactical Objectives
To launch a new product line that targets a new customer segment.
Example 2
Stratetgic Objectives
To Improve customer satisfaction
Tactical Objectives
To reduce customer wait time by 50%
Example 3
Stratetgic Objectives
To increase employee engagement
Tactical Objectives
To implement a new employee recognition programme
CSR (Corportate Social Responsibility) :
Definition
CSR refers to an objective in which the business acts in a socially and ethically responsible way
Example of CSR :
McDonald's employees regularly go on litter patrol to collect rubbish.
During the global COVID-19 pandemic, Zoom Inc gave away premium version of zoom video conferencing software to school, completely free of charge, to help educators and students affected by closure.
How businesses Handle CSR?
Many business have dedicated funds and employees to look after CSR and make sure the business contributes towards CSR activites.
Why do business Handle CSR :
Some business perform CSR out of a genuine concern for the society, and the ecology
Some businesses do it as it helps them potrait a good image in the market which may help them get more customers
Sometimes, the business may get bad publicity for some action performed by them, in such a case, good deed of CSR will help the business to some extent to counter the bad effects.