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Instructor: Dr. John Chambers

PACKET: Intro to the MacArther University Demo Course

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Learning Objectives and Required Readings

Example Lecture

Assignments

Discussion Activity

Assessments

Many Instructors provide a weekly lecture which corresponds to the material being covered in the book. This is an example of what a lecture might look like in an online course:

Chapter 9 Lecture

The author suggests that there are nine critical components of a good mission statement. Please review them in the text. Many (most) mission statements do not include the "essential" components. Keep in mind that a mission statement is meant to be read by employees, stockholders, customers, suppliers, regulators, and other stakeholders of the organization. It should be published and visible for all to read. What are the critical components that you think are necessary keeping in mind the purpose of a mission statement?


Over the semesters, I have asked students to find and analyze "real" mission statements and some of the mission statements and the analyses are quite interesting. I will publish a few for you here. Feel free to visit the mission statement links provided for examples of good and "not so good" mission statements (at least according to your author.)

The first mission statement and analysis I am presenting is an actual assignment submission...AND the resulting response from a representative of the company that took issue with the student's analysis. It makes me smile every time I see it! The fact that the Vanguard representative replied to the student's email is quite impressive!
Take a look...from a fellow student...

"I chose The Vanguard Group. Their Mission Statement URL is http://www.vanguard.com/about/1_2.html
I entrust them with my money so I thought they would be a good company to profile.

Their Mission Statement:

"To provide a broad range of mutual funds and auxiliary financial services that meets the needs of individual and institutional investors, in accordance with the highest standards of quality and at the lowest reasonable cost."

Vanguard's Mission Statement contains hypertext links. I like this idea. It provides an uncluttered statement with a depth of information-plus a sales pitch. (I will provide the links in my discussion.)

My analysis of the nine essential parts of a Mission Statement - (9 points would be a perfect score)

1. Customers: Vanguard's customers are "individual and institutional investors." This is clear and to the point - 1 point

2. Products or services: Vanguard provides "a broad range of mutual funds" http://majestic.vanguard.com/FP/DA , and "auxiliary financial services" http://www.vanguard.com/catalog/service/5_3.html . The links tell you all you need to know about the products Vanguard offers. - 1 point

3. Markets: Oops. No geographic market defined. They probably did not read the Strategic Management book like we did! - 0 points

4. Technology: No technology mentioned. From a customer's viewpoint, however, I can say that their technology is seamless. I get secure e-mailed statements, which by the way are environmentally friendly, and they have a very informative web site. - 0 points

5. Concern for survival, growth . . : No mention here of survival, growth, profitability or financial soundness. - 0 points

6. Philosophy: No philosophy stated. After reading about Vanguard, I do believe that their philosophy and self-concept are intertwined. They firmly believe in keeping management costs down and offering excellent customer service. - point

7. Self-Concept: Vanguard's strengths are "highest standard of quality" http://www.vanguard.com/about/1_2_3.html and "the lowest reasonable cost" http://www.vanguard.com/about/1_2_4.html . They are well known in the mutual fund industry for both of the strengths. - 1 point

8. Concern for public image, environment: No mention of concern for public image, environment. Even if they don't say it, at least they act it. See number four above. - 0 points

9. Concern for employees: No mention of concern for employees. - 0 points

Total: 3 points

Not such a great score. As a customer, I still give them two thumbs up. I will send them this and see if I get a response."

This is the response the student received from Vanguard...

Vanguard Message Number RS1N-1GD6-01

Dear 'student',

Thank you for sharing with us your analysis of our Mission Statement. I found it to be fascinating -- indeed, even thought-provoking -- and would like to provide you with a general reaction to your analysis.

First, an overview. While I am not familiar with the Strategic Management textbook from which you derived your "nine essential parts of a mission statement," we might take issue with the thought that a mission statement must contain a certain number of elements or that it must include specific references to the use of technology or a concern for survival, etc. Indeed, the latter should be so basic as to not require notice. Equally important, a mission statement that attempts to cover "nine essential parts" could become so cumbersome as to render it incomprehensible to some -- if not most -- of its intended audiences. Conversely, one could also argue that the nine points in your list is incomplete; in this age of "quality" that is the subject of countless books and seminars, and the pursuit of which has consumed many corporations, it was noticeably absent from your list.

Rather than developing an expansive, widely inclusive mission statement, we followed our belief in the concept that "less is more" and developed one that is highly focused on our essence -- what we are "all about" once everything else is distilled away. Then, we have chosen to address such specifics as the use of technology and the need to grow and concern for our crew (our preferred term for employees) -- all of which support our mission statement -- through a separate statement called "Vanguard's Critical Success Factors." (I'll come back to this momentarily.)

In terms of your analysis, I certainly agree with your points 1 and 2. As for #3, Markets -- we specifically left that off of our mission statement. We could have said something like "In markets where we choose to compete" -- but that's stating the obvious. We could have said "In the USA, Europe, and Australia" -- where we are. But what about where we want to be in the future? Certainly we'd be foolish to signal to the marketplace where we might be looking next...and if we didn't put our next markets in our mission statement, wouldn't we be in violation of our mission statement if we went somewhere that we didn't list?

As for #4, Technology -- we address that in our Critical Success Factors. The fact is, we do not treat technology as a separate and distinct entity. It is woven into our corporate fabric, serving as a support function to all of our goals and objectives. We do not see technology as being our mission; rather, it to be used to support our mission.

As for #5, Concern for survival, growth -- again, this is addressed in our Critical Success Factors. Its omission is probably a greater reflection of our belief that "if we focus on doing the right things right -- i.e., fulfilling our mission statement" -- growth will be achieved. However, we do not seek growth for growth's sake...indeed, in some respects, growth is viewed as a by-product (some would even say a "curse") that results from doing the right things right.

As for #6, Philosophy -- your analysis is correct: our philosophy and self-concept are intertwined, and inseparable. We offer what we believe is the highest value proposition in our industry, as stated succinctly in the closing phrase of our Mission Statement -- "...the highest standards of quality and at the lowest reasonable cost." So, we think you ought to give us the point for this one.

We agree with #7.

As for #8, Concern for public image, environment -- we are all about substance, from which an unshakable image will be derived. To us, putting a concern for public image in a Mission Statement makes it sound like some publicity effort, done primarily -- if not solely -- for effect. That's not what we are about.

But that doesn't mean we don't care about our image...only that a focus on that image misses the point. Once again, if we're doing the right things right, the proper image will follow. As for a concern about the environment, well, we're not a manufacturing firm creating toxic wastes. Thus, we're not so sure that this belongs in our Mission Statement.

As for #9, Concern for employees -- we address this in our Critical Success Factors. We see concern for our employees as being important to achieving the success of our mission, not being a part of our mission in and of itself. Our mission is as it is stated in our Mission Statement. Concern for our crew is, of course, critical -- for, without a talented and productive crew, we cannot achieve our mission.

Now, despite achieving a score of only 3 on your 9-point scale, we seem to be doing alright. We have, for the third consecutive year, ranked #1 in net cash inflow for our industry; we again dominated the "Forbes" list of "best buy" funds (taking 42% of the list, up from 36% a year ago); our shareholder retention rate continues to be twice the industry average; our average expense ratio declined again (even as the industry's rate has either remained steady or may have risen again); and we have received either the highest or one of the highest scores for client service in surveys conducted recently by Smart-Money, Worth, and Mutual Funds magazines. And our business strategy continues to be lauded in academia, particularly by such a luminary as Michael Porter at the Harvard Business School.

I have repeatedly referenced our Critical Success Factors, so I will list them below. Note that by separating them from the Mission Statement, we are able to keep that Statement highly focused and simple. We are also able to develop specific and measurable objectives that, if they are achieved, will help us fulfill our Mission. And we are able to adapt, modify, or add objectives as conditions change -- without changing our Mission Statement. The Critical Success Factors are:

1. Provide investment returns that are consistently better than those of competitors.

2. Serve as the role model for the industry by adhering to the highest standards of ethical behavior and fiduciary responsibility.

3. Maintain highly effective controls to safeguard assets.

4. Be easy for clients to deal with.

5. Maintain the lowest expense ratio.

6. Develop and maintain a competent, motivated, productive, and diverse crew.

7. Provide assistance, education, guidance, and, when appropriate, advice that

enable clients to meet their financial goals.

8. Use technology to sustain competitive leadership.

9. Attract new clients and assets.

10. Adapt, evolve, and continuously improve to attain unmatchable quality.

Note that each of these supports our Mission Statement. They are not our Mission -- they are in support of our Mission. At the end of the day, what counts to those who have chosen to invest in our funds is -- first and foremost

-- "Am I earning a return better than that provided by alternative mutual funds?" That is followed quickly by "Am I getting a high standard of service?

That's what our shareholders want...and it is our mission to deliver that to them. Everything else is in support of that mission.

I hope this is helpful to you and your class. Thanks again for writing and sharing your analysis with us.

Sincerely,

Brian S. Mattes

Principal Vanguard

Here are a few mission statement links you may look at...

http://www.Daimlerchrysler.com/index_e.htm
farmerjack.com/fjmision.htm
www.swabiz.com/about_swa/customer_service_commitment.html
www.the-body-shop.com
www.dell.com/us/en/gen/corporate/vision_mission.htm
www2.nordstrom.com/aboutus/diversity/mission_statement.html

There are lots of other examples of mission statements in Chapter Three. Should keep you busy this week!