Chapter 2

The operating______ of organizations should be to identify customersÕ' needs and

then provide a product or service to fulfill those needs.

philosophy
culture
self-concept
concern for public image

Carefully prepared_ ____________ and_________ ___ are widely recognized by both

practitioners and academicians as the first step in strategic management.

long-term objectives; goals

creeds; long-term objectives
vision statements; mission statements
short-term objectives; long-term objectives

The vision and mission statement can often be found:

on supplier invoices.
in a competitive market analysis.
on the front of annual reports.
in the SEC report.

It is important to involve_____________ _ in the process of developing a mission

statement.

only those managers who will use the mission

very few people to ease consensus-building
as many managers as possible
as wide a variety of upper-level managers as possible

Which of the following is not one of the reasons identified by King and Cleland for
carefully developing a written mission?

To ensure ambiguity of purpose within the organization

To establish a general tone or organizational climate
To provide a basis for allocating organizational resources
To facilitate the translation of objectives into a work structure involving the
assignment of tasks to responsible elements within the organization

During strategy________ _, corporate social policy should be set and administered.

formulation
control
evaluation
implementation

What is the recommended length of an effective mission statement?

Less than 200 words
One sentence of 10 to 20 words
 There is no recommendation. It can be as long as the management wants.
One page

A study by Rarick and Vitton found that firms with a formalized mission statement
have
the average return on shareholdersÕ' equity compared to those firms without a
formalized mission statement.

twice
five times
half
one quarter

A good operating philosophy of organizations should be to________ and then

_________.

identify customersÕ' needs; provide a product or service to fulfill them

develop a market; identify a customer base
take an environmental orientation first; take a customer orientation
develop a product or service; identify a market for the product or service

Which of the following is a question that an effective mission statement answers?

Is the firm technologically current?
What is the company we want to be in the long-range future?
What is our net worth?
What is our profitability?

The vision statement should be short, preferably one sentence.

True
False

Commitment to a companyÕ's strategy and intellectual agreement on the strategies

to be
pursued do not necessarily translate into an emotional bond.
True
False

The highest level of managers should develop the vision statement, which should be
concise.
True
False

Each division of a multidivisional organization should develop a mission statement.

True
False

Stakeholders of an organization include stockholders, customers and creditors, but

not
the competitors.
True
False

Developing a comprehensive mission statement is important because divergent

views
can be revealed and resolved through the process.
True
False
An effective mission statement should include five components.
True
False

During strategy formulation, social policy should be reaffirmed and changed.

True
False

A mission statement should be specific and thus encourage the creative potential for
the
organization.
True
False

The term social policy embraces managerial philosophy and thinking at the highest
levels
of an organization.
True
False

What is the purpose of a mission statement? Differentiate between a mission and a

vision
statement.

Many organizations develop both a mission statement and a vision statement. Whereas the
mission statement answers the question Ò"What is our business?Ó" the vision statement
answers the question Ò"What do we want to become?Ó" Students should refer to Ò"What Is Our
Business?Ó" and Ò"Vision Versus MissionÓ" for more information related to this question. These
sections are located on pages 59-60.
Why are the vision and mission statements important to a given organization? Why are
they important to effective strategic management? Cite several reasons organizations should
carefully develop a written mission statement.
King and Cleland recommend that organizations carefully develop a written mission
statement. They provide several reasons stated in the text. These include ensuring unanimity of
purpose within the organization, providing a basis for allocating resources, establishing a general
organizational climate, serving as a focal point for identification with the organizationÕ's purpose
and direction, and others. Students should refer to the importance of vision and mission
statements on pages 61-62 in developing their answers.
Why is the resolution of divergent views important in an organization? How can the
development of a mission statement help the organization to achieve this? What could happen if
considerable disagreement over the vision and mission of a firm is not resolved?