Firms should strive to engage in social activities that have economic benefits. For example, Merck & Co. recently developed the drug ivermectin for treating river blindness, a disease caused by a fly – borne parasitic worm endemic in poor, tropical areas of Africa, the Middle East, and Latin America. In an unprecedented gesture that reflected its corporate commitment to social responsibility, Merck then made ivermectin available at no cost to medical personnel throughout the world. Merck’s action highlights the dilemma of orphan drugs, which offer pharmaceutical companies no economic incentive for development and distribution.
Despite differences in approaches, most American companies try to assure outsiders that they conduct their businesses in socially responsible ways. The mission statement is an effective instrument for conveying this message.
Some strategists agree with Ralph Nader, who proclaims that organizations have tremendous social obligations. Others agree with Milton Friedman, the economist, who maintains that organizations have no obligation to do any more for society than is legally required, Most strategists agree that the first social responsibility of any business must be to make enough profit or cover the costs of the future, because if this is not achieved, no other social responsibility con be met. Strategists should examine social problems in terms of potential costs and benefits to the firm, and the should address social issues that could benefit the firm most.
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Components of a Mission Statement
Mission statements can and do vary in length, content, format, and specificity. Most practitioners and academicians of strategic management feel that an effective statement exhibits none characteristics or components. Because a mission statement is often the most visible and public part of the strategic-management process, it is important that it includes all of these essential components
Customers- Who are the firm’s customers?
1. Products or services – What are the firm’s major products or services?
2. Markets – Geographically, where does the firm compete?
3. Technology – Is the firm technologically current?
4. Concern for survival, Growth, and profitability – Is the firm committed to growth and financial soundness?
5. Philosophy – What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
6. Self-concept – What is the firm’s distinctive competence or major competitive advantage?
7. Concern for public image – Is the firm responsive to social, community, and environmental concerns?
8. Concern for employees – Are employees a valuable asset of the firm?
Excerpts from the mission statements of different organizations are provided in Table 2-2 to exemplify the nine essential mission statement components.
Writing and Evaluating Mission Statements
Perhaps the best way to develop a skill for writing and evaluating mission statements is to study actual company missions. Therefore, six mission statements are presented in Table 2-3. These statements are then evaluated in Table 2-4 based on the mine criteria presented above.
There is no one best mission statement for a particular organization, so good judgment is required in evaluating mission statements. In Table 2-4 , a Yes indicates that the given mission statement answers satisfactorily the question posed in Table2-2 for the respective evaluative criteria. Some individuals are more demanding than others in rating mission statements in this manner. For example, if a statement includes the word employees or customer, is that alone sufficient for the respective component? Some companies answer this question in the affirmative and some in the negative. You may ask yourself this question: “If I worked for this company, would I have done better with regard to including a particular component in its mission statement?” Perhaps the important issue here is that mission statements include each of the nine components in some manner.
As indicated in Table 2-4 , the Dell computer mission statement was rated to be the best among the six statements evaluated. Note, however, that the Dell Computer statement lacks inclusion of the “Philosophy” and the “Concern for Employees” components. The Pepsi Co mission statement was evaluated as the worst because it included only three of the nine components. Note that only one of these six statements included the “Technology” component in its document.
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