UNIT 2 MISSION, OBJECTIVES AND STAKEHOLDERS

ORGANISATIONAL MISSION
A mission statement is a statement in writing that describes the basic purpose of an organisation and what it is trying to accomplish. It outlines the broad direction that an organisation will follow and summarises the reasoning and values that underlie that organisation. The purpose of the mission statement is to communicate to all the stakeholder groups. It has been described as the reason for being.

Examples
Chrysler To produce cars and trucks that people will want to buy, will enjoy driving and will want to buy again

Girl Guides Association To help a girl reach her highest potential

Du Pont We, the people of Du Pont, dedicate ourselves to the work of improving life on our planet, we have the curiosity to go further.....the imagination to think bigger..... the conscience to care more.....we will answer the fundamental needs of the people that we live with to ensure harmony, health and prosperity in the world. We will respect nature and living things... and will each day leave for home with conscience clear and spirits soaring.

Communicates to varying stakeholder groups. Have a look at the above, who are they attempting to communicate with?

What should a mission statement be like?

Different characteristics exist and are dependent upon the purpose of the mission setting within an organisation. It acts as a starting point for the derivation of objectives and strategy as well as communicating with the stakeholders

Main characteristics It is not time based; It should not include commercial terms;

Other characteristics It may be a brief statement of purpose that is easily understandable; Pepsi To beat Coke Fedex Absolutely, positively, overnight;

It may state the general areas that the business intends to operate in It should aim to communicate with as many stakeholder groups as possible It should be flexible enough to cater for change; It may attempt to reflect the distinct advantages of the organisation; It may be memorable with a view to incorporating into brand strategy

Mission and objectives

A mission is an open-ended statement of the firms purpose and strategy. Objectives are more specific and seek to translate the mission into a series of mileposts for the organisation to follow. Objectives are often considered to be SMART:

Specific clear statement, easy to understand; Measurable to enable control and communication down the organisation; Attainable It is pointless setting unachievable objectives; Relevant appropriate to the mission and stakeholders; Timed have a time period for achievement.

Objectives
Are financial and non-financial Will be multiple Will conflict Will vary across stakeholder groups in terms of importance Will need to be prioritised you cant please all of the stakeholders at the same time Will drive the strategy ultimately

Stakeholder analysis
Mission and objectives need to be developed with two contexts in mind:

1 2

the interests of those who have to carry them out e.g. managers and staff;

the interests of those who focus on the outcome e.g. shareholders, customers, suppliers etc.

Together these groups are known as stakeholders the individuals and groups who have an interest in the organisation and as such may wish to influence its mission, objectives and strategy.

Thus when analysing stakeholders, we need to assess their power and interest in the organisation.

Given the range of interests in organisations, it is not surprising to find that the mission may take several months of negotiation before it is finalised. The key aspect is that the organisation must take the stakeholders into account when formulating the mission and objectives of the company. The problem is that stakeholder interests often conflict and so an order of priority is required based upon relative power and interest. The different stakeholders need to be identified and potential for conflict needs to be ascertained in advance. The mission setting process can be a useful basis for getting the stakeholder groups to communicate their ideas and then be able to appreciate other viewpoints.

The more power and interest, the greater the involvement in setting the mission and strategy.

Mendelow provided an initial starting point for stakeholder environmental analysis via his mapping framework

MENDELOWS POWER INTEREST MATRIX

Stakeholder Mapping: The Power Interest Matrix

Low

Minimal Effort

Keep Informed

Power

Keep Satisfied
Low Level of Interest

Key Players
High

High

Key players will be the most significant. Look to see how many there are. The more there are, the greater the need for compromise and the larger the chance of conflict. Keep satisfieds will usually leave you alone so long as you adhere to their conditions e.g. being socially responsible. Remember things change and so the keep informed of today may be the key player of tomorrow.

Managing the relationship with stakeholder groups

Powerful stakeholder groups must have confidence in the management team of the organisation. The organisation should ensure therefore that adequate management systems are in place. Some suggestions: Allocate organisational responsibility for the process along with a budget; Use a team for a broad range of opinion and expertise; Establish and order the objectives of the organisation. Identify the areas for potential conflict and target resources into those areas; Frequent face-to-face meetings with the key player and keep satisfied groups; Communication processes for the other two groups possibly via public Q&A sessions; Periodic formal reporting and the use of a website for frequently asked questions.

ETHICS AND SOCIAL RESPONSIBILITY

Social responsibility
The idea that an organisation should behave responsibly in the interests of the society in which it operates. This behaviour requires an ethical approach where ethics can be defined as... The discipline dealing with what is good and bad and right and wrong or with moral duty and obligation. Websters Dictionary The organisation operates within an environment and that organisation will need to behave ethically in the long term or that environment will reject it and the organisation will cease to be. Most organisations fail within a very limited time span (100 years ) and research has suggested that a significant factor contributing to that has been the failure to act with social responsibility. The suggestion is that social responsibility is the key factor to ensure the long-term survival of the organisation. Lack of it implies a short-termist viewpoint and systems need to be deployed to ensure a broader perspective in setting strategy for an organisation.

The Problem
Ethical behaviour definitions will: Vary between cultures and individuals; Vary over time within those cultures and be subject to continual slow adaptation; Be influenced by emotion and so lack rationality; Lead to pressure groups pressing for certain kinds of behaviour that may eventually lead to open conflict.

Most believe that public sector organisations have social responsibility as one of their primary objectives (or should have). Not all believe that private companies should have social responsibility on their agendas. Milton Friedman argues: The business of business is business He sees the only responsibility as being to the shareholder and views donations to charity and the Arts as being fundamentally subversive. The organisation will need to consider the ethical context of their strategy and ensure that they understand how society may change in the future and how they themselves may need to adapt.

Consider
Is it ethical to: Experiment on animals? Drill for oil? Build roads through the countryside? Allow smoking in public areas? Pay senior executives large increases in salary? Train students to pass exams?

Different groups of people will respond in different ways. The management team will need to consider these viewpoints in developing their strategies.

Central to achieving strategic success is the idea of fulfilling customer and consumer needs (the marketing concept). One of those needs may well be a requirement for ethical behaviour by the organisation. Thus its common to find the expectation of organisational social responsibility as being one of the objectives in a stakeholder priority listing

The social responsibility argument benefits the company in the following ways: Product safety can be used as a core competence and as a basis for differentiation. Working conditions can be used to attract higher calibre staff. Honesty in approach can lead to brand strengthening. Avoiding pollution will save costs in the long run and win business in increasingly sophisticated markets where this is now a threshold competence. Avoiding discrimination gives access to a wider human resource base. Sponsorship tax deductible, staff rewarding and advertising.