WEEK 2

A. Defining the Companys Purpose, Values, Mission, Vision, and

Objectives.
B. Formulation of Mission and Vision Statement, Goal and
Objectives, Social Responsibility and Business Ethics.
Approaches to Corporate Responsibility.

 Learning Outcomes

At the end of the lecture students should be able to:

identify the mission and vision of an organization

formulate the mission, vision, values, objectives and goals of an organization

under importance of the Stakeholders Approach to Social Responsibility

 Companys Purpose: The companys reason for existence
Values: Basic convictions about what is right and wrong (Robbins & Coulter, 2007).

Mission: A broadly framed but enduring statement of a firms intent (Pearce & Robbinson,
2013).
A statement of the purpose of an organization (Robbins & Coulter, 2007). An enduring
statement of purpose that distinguishes one organization from others (David, 2009)

Other terms used for mission statement

What is our business?
Reason for being
Creed statement and Statement of Purpose
Why we are in existence
 Components of a Mission Statement
Basic Products or Services: What are the firms major products
or services?
Primary Markets: Where does the firm compete geographically,
whether in Ghana alone or across nations.
Principal Technology: Is the firm technologically current? Is it
using the current means of producing its products?
Customers: Need some information on your customers. State
who your customers are.
Concern for Survival, growth, and profitability: Is the firm
committed to growth and financial stability?
Philosophy: What are the firms basic beliefs, values, and ethical
priorities/considerations. Other
 organizations call it the Company Creed.
Concern for public image: These are qualities that
customers attribute to organizations. How responsive is
the firm to societal and environmental concerns.
Company Self-Concept: What are the firms
competitive advantage and core competences?
Personality of the organization, your competencies or
those that are central to your strategies.
Concern for Employees: If an organization has
employees who that motivated, satisfied, these can be
transferred unto your customers.
NB specification of the first 3 are of primary concern,
because together they describe the firms activity.
 Vision: - A statement that presents a firms strategic intent designed to
focus energies and resources of the company on achieving a
desirable future (Pearce & Robbinson, 2013).

Benefits of Vision Statement

- It provides guidance as managers get to know where the organization wants to be and this
motivates them to contribute their effort to its achievements.

- It enables the organization to outline or state its objectives.

Goals: Broad targets of an organization. Desired outcomes for individuals,

groups, or entire organization.

Objectives: Specific targets of an organization.

B. Formulating of Mission and Vision Statement, Goals and
Objectives, Social Responsibility and Business Ethics.
Approaches to Corporate Responsibility.

I. FORMULATING A MISSION
a. The process of defining the mission of a company can be best understood by thinking about the
business at its inception.

b. A business normally begins with the beliefs, desires, and aspirations of a single entrepreneur. Such
missions are influenced by the following:
producing a product or service that can provide benefits at least equal to its price.
providing a product or service that can satisfy a customer need of specific segments that is currently
not being met adequately.
The technology that is to be used in production will provide a cost-and quality-competitive product or

service.
 SOCIAL RESPONSIBILTY (SR)
Definition

SR is the obligation of an organization to seek actions that protect and improve the
welfare of society along with its own interest (Bartel & Martin, 1998).

In defining or redefining the company mission, strategic managers must recognize the
legitimate rights of the firms claimant. These include not only stockholders and
employees but also outsiders affected by the firms actions, often referred to as
stakeholders.
 Approaches to Social Responsibility Inside stakeholder --- Company --- Outside
Stakeholders
Stakeholders Approach e,g, Exec officers -- mission ---- e.g. Customers etc

Two types of Stakeholders (Dynamics of Social Responsibility)

o Inside (Stockholders and Employees)
o Outside (Customers, Competitors, Government etc).
 Outside Clamant/Stakeholders: People affected by the organizations actions and
they include community members, customers among others. These interest groups have
justifiable reasons to expect that the firm satisfy their claims in a responsible manner.

Suppliers: Timely consumption of trade credit obligation, dependable buyers, have the
opportunity to make fair profit

Customers: Want value for their money, want a sense of security in their jobs, clean,
orderly and safe working conditions etc.

Competitors: Observation of the norms for competitive conduct established by society

and the industry. In other words, they expect a fair competition. An organization cannot
go about reducing its product so as to direct all customers to its organization, for
instance.
 Government: Adherence to legislations. For instance, abiding by the
rules and regulation that govern the industry within which an
organization operates.

Local Community: Regular employment and contribution to

projects.

General society: They expect organizations to participate in helping

them solve some of their problems. This is because, as a result of their
activities they tend to, for instance, pollute their environment, make a
lot of noise etc which affect society members.
International Community: Knowing the international laws that
govern an organizations activities and abiding by them.
 AREAS/TYPES OF SOCIAL REPONSIBILITY
Economic Responsibilities
Every organization must satisfy its economic obligations. By this they are supposed to
provide products (goods and services), make profits in order to satisfy their
shareholders. With this obligation, they will end up getting enough to pay their
employees, taxes, and provide employment etc.

Legal Responsibilities
The firms obligations to comply with the law that regulate business activities (Pearce
& Robinson,). The essence is to correct the balance of power between buyers and
sellers in the market place.
Ethical Responsibilities
By this, we are looking at things that stakeholders expect
organizations to do. It includes behaviors and activities that are
expected of businesses by society members. For instance, doing
business in an environment where roads are terrible. If you dont do it,
it doesnt mean you are unlawful but ethically you need to do it.

Discretionary Responsibilities
These are just voluntary contributions and they include voluntary
beneficial activities that are not strongly expected of business by
society members.

BUSINESS ETHICS - Read for discussion next week

 DIMENSIONS TO STRATEGIC DECISIONS
Strategic Issues Require Top-Management Decisions
Because strategic decisions affect several areas of a firms operations.
Again it is usually top management that has the perspective needed to understand the broad
implications of such decisions and has the power to authorize the necessary resource allocations.

Strategic Issues Require Large Amounts of the Firms Resources

- SDs involve substantial allocations of people, physical assets, or money that either must be redirected from internal

sources or secured from outside the firm.

- It is because they also commit the firm to actions over an extended period.
Strategic Issues are Future Oriented: SDs are based on what managers forecast, rather
than on what they know

Strategic Issues often Affect the Firms Long-Term Prosperity:

Strategic Issues Usually Have Multifunctional or Multibusiness Consequences
Strategic Issues Require Considering the Firms Environment