CHAPTER I

INTRODUCTION
1.1 Background
There are various issues to consider in making an organizational strategic plan. Strategic plans
often mean a change in organizational structure or a move toward change. Change can be a
difficult process and sometimes requires time. It is important to get employees on board with the
decision making process. This can be articulated through the mission and vision statement of the
organization. Articulating and repeating the positives of the move toward change in the
organization will help employees stay engaged and motivated in the process.
Change is an essential component of strategic planning. This involves moving the organization
or program forward to create or change something. Some plans are created out of the need for
the organization to move in a certain direction, and other plans develop organically. Mission and
vision statements will be important to help communicate the goals of the plan to employees and
the public.
A vision statement sets out a company's long-term goals and aspirations clearly and concisely. A
vision statement is intended to inspire and motivate the company's workforce by providing a
picture of where the organization is heading. It also provides a reality check for managers, who
can compare their strategic objectives and operational plans to the vision statement. If a planned
course of action doesn't move the company toward its vision, it may need to be revised.
A mission statement defines the business sector in which a company operates and sets out its
key purpose. It summarizes what the company does and why. It also sets out how the company
conducts its business and identifies key stakeholders, such as shareholders, customers and
employees. A mission statement helps employees understand where their contribution fits into
the company's objectives. It also helps other stakeholders decide whether they want to do
business with the organization.
Strategic planning will likely have its successes and failures. Leaders should celebrate the little
successes toward meeting objectives, which are part of the mission and vision statement. The
mission statement will help measure whether the strategic plan aligns with the overall goals of
the agency. The vision statement helps to provide inspiration to employees. Employees who feel
invested in the organizational change are more likely to stay motivated and have higher levels of
productivity.

Well-written vision and mission statements ensure that each element of the strategic
management process is aligned to the company's long-term goals. Managers use clear and
concise vision and mission statements to communicate their aspirations to stakeholders.
Employees understand where to focus their efforts if they align their daily work with the vision
and mission. Clear vision and mission statements allow customers, suppliers and shareholders to
choose whether or not they want to do business with the company.

1.2 Purpose of the paper

1. To know the formulating process of vision, mission and objectives in the company
2. To know the relationship between vision, mission and objectives in the company
CHAPTER II
Discussion

2.1 Formulating process of Vision and Mission

There are three main steps in the formulation of the company strategy. First, develop a
strategic vision and mission. Second, goal setting, and the third final step, developing
strategies to achieve those goals. The following explanation of the vision and mission.
Vision
Vision is mental perception of the kind of environment an individual, or an
organization, aspires to create within a broad time horizon and the underlying
conditions for the actualization of this perception (description of something in the
future).
Vision is an established business purpose; also the direction in which the business was
founded and describes the direction of the goal at a time when that will come.
Vision is a permanent statement to communicate the existence and nature of the
organization based on its purpose. Vision is a direction map business goal is to be
developed. Vision is the inclusive nature of the business horizon and see the illustrious
(future - futuristic), and is still relatively abstract. For example:
CHEVRON

The symbol of partnership

VOLVO

Excellence

NOKIA

Connecting people

PHILIPS

Let's a make things better

STARMILD -

Make your life brighter

MM-UGM

Quality is our tradition

The three elements of a strategic vision

1. Coming up with a mission statement that defines what business the company is
presently in and conveys the essence of who we are, what we do, and where we
are now
2. Using the mission statement as a basis for deciding on a long term course,
making a choices about where we are going and charting a strategic path for
the company to pursue
3. Communicating the strategic vision in clear, exciting terms that arouse
organization wide commitment.
Characteristic of good vision
a. Future Focused: An effective vision answers the question what will our business
look like in 5 to 10 years time? It describes the organizations desired future. A
vision makes clear the organizations direction, providing a clear picture of what the
business will look like in 5 10 years time.
b. Directional: An effective vision provides direction and makes clear where the
organization is going.
c. Clear: An effective vision provides guidance for decision making and independent
action. This requires the vision to be clearly articulated and easily understood.
d. Relevant: An effective vision is grounded in and an extension of the organizations
past. Visions dont exists in a vacuum.
e. Purpose-Driven: An effective vision provides a larger sense of purpose for the
organization and people.
f. Values Based: An effective vision connects people to the oganizations core values.
Values are the beliefs or ideals that the organization shares about whats good or bad.
g. Challenging: An effective vision challenges us, its an invitation to greatness. A
vision is a goal that should challenge us, stretch us and set a high standard for the
organization.
h. Unique: An effective vision reflects whats unique about the organization, it
recognizes what makes it different. A vision is unique when it declares what makes
the organization stand out and why it matters.
i. Vivid: An effective vision provides a vivid mental image of what the organization
will be like in the future.

j. Inspiring: An effective vision engages and inspires people to commit to a cause.

Vision appeals to the hearts and minds of people. Vision is inspiring when it captures
the hearts of people
The Benefits of Creating a Vision
A vision is an idealized picture of the future of the business or organization. This can
bring many benefits to you.
1. Visioning is the first step in strategic planning.
2. A vision shared by all the members of your business can help all members set goals
to advance the organization.
3. A vision can also motivate and empower employees.
4. Without a strong vision, strategic plans cannot be properly delineated since there is
no guiding principle or ideal to plan.
5. A vision brings meaning to peoples work, mobilizes them to action, and helps them
decide what to do and what not to do in the course of their work.
6. An effective vision strikes a chord in people, motivates them by tapping their
competitive drive, arouses desire for greatness or interest in doing the right thing,
tantalizes them with personal gain, or appeals to their need to make a difference in the
world.
7. A vision is an idealized picture of the future organization and it expresses the
organization's reason for existence.
8. Visions grab people and then bring them into the fold.
9. When a leader's vision is effective and strong, employees and stakeholders get
caught up in what they are doing, absorb the vision, and commit themselves to the goals
and the values of the leaders.
Mission
The mission is a statement of the owner for the management / business management
business that made something useful, an expectation about the scope of the business,
and what to do business as well as for anyone now.
The mission is essential purpose of the organization, concerning particularly why it is in
existence, the nature of the business it is in, and the customers it seeks to serve and
satisfy.

The mission is a duty imposed on management by the owner to perform certain

activities to make the business successful in the operation, such as becoming a leading
business, a business that serves its customers well, the most successful businesses in the
sector.
A mission statement is an enduring statement of purpose that distinguishes one business
from other similar firms. A mission statement identifies the scope of a firms operations
in product and market terms.
The mission is not to make a profit.
Sometimes companies couch their business mission in terms of making profit. This is
misguided profit is more correctly an objective and a result of what the company does.
The desire to make a profit says nothing about the business arena in which profits are to
be sought. Missions based on making a profit do not allow us to distinguish one type of
profit seeking enterprise from another.
One of the roles of a mission statement is to give the organization its own special
identity, business emphasis, and path for development, one that typically sets it apart
from other similarly situated companies.
Incorporating what, who, and how into the mission statement
A companys business is defined by what needs it is trying to satisfy by which customer
groups it is targeting and by the technologies and competencies it uses and the activities
it performs.
A strategically revealing mission statement incorporates three elements:
1. Customer needs or what is being satisfied
2. Customer groups or who is being satisfied
3. The companys activities, technologies, and competencies or how the enterprise
goes about creating and delivering value to customer and satisfying their needs.
Technology, competencies and activities are important because they indicate how much
of the industrys total production distribution chain its operations will span. For
instance, the business of a fully integrated firm extends across the entire range of
industry activities that must be performed to get a product or service into the hands of
end users.
A broad or narrow business definition and mission?
Broad definition
Furniture business
Telecommunications business

Narrow definition
Wrought iron
business

lawn

furniture

Beverage business
Global mail delivery business
Travel and tourism business

Long distance telephone service

business
Soft drink business
Overnight
package
delivery
business
Caribbean cruise ship business

Mission statements for functional departements

Theres also a place for mission statements for key function and departements within a
business R&D, marketing, finance, human resources, customer service, information
system. Every departement can help focus the efforts of its personnel by developing a
mission statement that sets forth its principal role and activities, the direction it is
headed and its contribution to the overall company mission. Functional and
departemental managers who think through and debate with subordinates and higher ups
what their unit needs to focus on and do have a clearer view of how to lead the unit.
Three examples from actual companies indicate how a functional mission statement
puts the spotlight on a units organizational role and scope:

The mission of the human resources departement is to contribute to

organizational success by developing effective leaders, creating high
performance teams and maximizing the potential of individuals.

The mission of the corporate claims departement is to minimize the overall cost
of liability, workers compensation, and property damage claims through
competitive cost containment technique and loss prevention and control
programs.

The mission of corporate security is to provide services for the protection of

corporate personnel and assets through preventive measures and investigations.
Characteristic of good mission statement

a. Make it as succinct as possible. A mission statement should be as short and snappy as

possible, preferably brief enough to be printed on the back of a business card. The
detail which underpins it should be mapped out elsewhere (see Vision and Values)
b. Make it memorable. Obviously partially linked to the above, but try to make it
something that people will be able to remember the key elements of, even if not the
exact wording
c. Make it unique to you. Its easy to fall into the motherhood and apple pie trap with
generic statements that could equally apply to any institution. Focus on what it is that
you strive to do differently: how you achieve excellence, why you value your staff or
what it is about the quality of the student experience that sets you apart from the rest.

d. Make it realistic. Remember, your mission statement is supposed to be a summary of

why you exist and what you do. It is a description of the present, not a vision for the
future. If it bears little or no resemblance to the organisation that your staff know it
will achieve little.
e. Make sure its current. Though it is not something which should be changed
regularly, neither should it be set in stone. Your institutions priorities and focus may
change significantly over time, perhaps in response to a change of direction set by a
new Vice Chancellor or Principal, or major changes in government policy. On such
occasions the question should at least be asked: does our current mission statement
still stand?
Objectives
Setting goals and objectives for your small business is imp ortant to ensure its growth and
sustainability. Defining goals and putting together a comprehensive, employee-focused
management strategy represents an important part of strategic management. This means
analyzing the major initiatives that your company takes and putting translating
initiatives into reasonable and workable goals.

Objectives represent a managerial commitment to achieve specified results in a

specified period, of time. They clearly spell out the quantity and quality of performance
to be achieved, the time period, the process and the person who is responsible for the
achievement of the objective.
Management by Objectives
In 1954, leadership and management expert Peter Drucker introduced the concept of
"Management by Objectives," sometimes also called "Management by Results." MBO
is a cooperative, business-wide strategy for setting goals and implementing
organizational change. Importantly, MBO compares progress toward meeting goals with
the actual performance of the business and its employees. The idea is that when
employees are involved in helping to set their own goals and those of the business,
they'll be more likely to meet the goals because a sense of buy-in gets created.
Short-Term Objectives
Short-term objectives represent the goals an organization sets that are centered on tasks
that can be achieved within the next six months or, at the outset, within one year. An
example of a short-term goal might be to increase sales by 10 percent. This is an easily
measurable goal and employees can be held directly accountable for ensuring that it is
met.

Long-Term Objectives
Long-term objectives define any goal that has a time frame exceeding one year.
Business goals that are normally considered long term include developing a new
product, growing annual revenue and developing a comprehensive marketing and public
relations strategy. Importantly, long-term goals must not go on forever. While they take
more time than short-term objectives, long-term goals must be realistic and time bound.
Need for Establishing Objectives
The following points specifically emphasize the need for establishing objectives:
-

To provide a yardstick to measure performance of a department or SBU or

organization.

To serve as a motivating force. All people work to achieve the objectives.

To help the organization to pursue its vision and mission. Long-term perspective
is translated in short-term goals.

To define the relationship of organization with internal and external

environment.

To provide a basis for decision-making.

All decisions taken at all levels of management are oriented towards accomplishment of
objectives.
Levels of Objective Formulation
The objectives are set at the three levels of strategy development in an enterprise, i.e.;
1. Corporate level
2. Business unit level
3. Functional or departmental level
Corporate objectives are those that relate to the business as a whole. The top
management of the business usually sets them and they provide the focus for setting
more detailed objectives for the main functional activities of the business. They tend to
focus on the desired performance and results of the business. It is important that
corporate objectives cover a range of key areas where the business wants to achieve
results rather than focusing on a single objective.
Peter Drucker has suggested that corporate objectives should cover eight key areas:
Area Examples
Market standing Market share, customer satisfaction, product range
8

Area Example
Market standing Market share, customer satisfaction, product
range
Innovation New products, better processes, use to technology
Productivity Optimum use of resources, focus on core
activities
Physical & financial resources Factories, business locations, finance, supplies
Profitability Level of profit, rates of return on investment
Management Management structure; promotion & development
Employees Organizational structure; employee relations
Public responsibility Compliance with laws; social and ethical behavior
Characteristics of Objectives
The following are the characteristics of corporate objectives:
- They form a hierarchy. It begins with broad statement of vision and mission and ends
with key specific goals. These objectives are made achievable at the lower level.
- It is impossible to identify even one major objective that could cover all possible
relationships and needs. Organizational problems and relationship cover a multiplicity
of variables and cannot be integrated into one objective. They may be economic
objectives, social objectives, political objectives etc. Hence, multiplicity of objectives
forces the strategists to balance those diverse interests.
- A specific time horizon must be laid for effective objectives. This timeframe helps the
strategists to fix targets.
- Objectives must be within reach and is also challenging for the employees. If objectives
set are beyond the reach of managers, they will adopt a defeatist attitude. Attainable
objectives act as a motivator in the organization.
- Objectives should be understandable once communicated. Clarity and simplicity should
characterize the language of formulation.
Process of Setting Objectives
Glueck identifies four factors that should be considered for objective setting. These
factors are:
9

Environmental forces, both internal and external, may influence the interests of
various stakeholders. Further, these forces are dynamic by nature. Hence, objective
setting must consider their influence on its process. As objectives should be realistic, the
efforts be made to set the objectives in such a way so that objectives may become
attainable. For that, existing resources of enterprise and internal power structure be
examined carefully.
The values of the top management influence the choice of objectives. A philanthropic
attitude may lead to setting of socially oriented objectives while economic orientation of
top management may force them to go for profitability objective.
Past is important for strategic reasons. Organizations cannot deviate much from the past.
Unnecessary deviations will bring problems relating to resistance to change.
Management must understand the past so that it may integrate its objectives in an
effective way.
SMART objectives
It is often sited that both corporate and functional objectives need to conform to a set of
criteria referred to
as an acronym SMART. These are summarised below:
Specific
Measurable

Achievable

Relevant
Time Bound

The objective should state exactly what is to be achieved

An objective should be capable of measurement so that it is
possible to
determine whether (or how far) it has been achieved
The objective should be realistic given the circumstances in which it
is set
and the resources available to the business.
Objectives should be relevant to the people responsible for
achieving them
Objectives should be set with a time frame in mind. These deadlines
also
need to be realistic

2.2 Relationship between vision, mission and objectives in the company

SPECIAL PURPOSES
PLAN
VIS
I
MISSION
GENERAL
PURPOSE

10

Reinforce the mission and vision

The mission statement typically describes an organization in order to:
Purpose. Why the organization exists and what it wants to achieve
Business, the main method or the main activities undertaken to fulfill the purpose of the
organization earlier.
Values. Principles or beliefs that guide the organization's members as they pursue the
organization's purpose.
If the mission statement summarizes the what, how and why an organization works, then the
formulation of the vision of presenting a picture in words of what would succeed it.

Arrange draft vision statement

A vision is a picture of success as a guide. If the mission statement that gives a blueprint for the
organization's work-what, why, and how he did his work-then it is a vision of the artist painting
the realization of that mission. If the mission statement answers the question of why the
organization exists, what business she lived, a vision statement answers the question, "would be
like if it seems to be successful?"
Drafting a vision statement. Like the mission statement, drafted a vision statement begins with
intuition and ideas, developed through discussion, and generate a sense of direction and
motivation together.
Determination of the vision and mission
Explain what is meant by the vision and mission of the organization and how it relates to the
goals set and strategies designed to achieve those goals.
Management vision is a desired perspective of the big picture: who we are actually, what we do,
and where we will go (where we are headed). Vision is a picture of the changes on future we
want to create. Meanwhile, the mission is to be implemented (the chosen track) so that the
vision can be achieved. The mission serves as a map on the way the organization to achieve the
expected goals achieved in the future. Every organization should strive to formulate a vision and
mission in life to be able to create beliefs on each member of the organization of the truth of his
ideals and noble values (core values) contained therein. The existence of a strong belief (faith)

11

that provides energy that never runs out for any creatures to work, the energy that is provided by
God for each of his servants in managing the natural environment.
Preparation of the mission
In the process of establishing a mission, it is important for management to define the identity of
the company's business that are being or will be undertaken.
To arrive at the definition of a good business, there are three factors that need to be covered are:
(1) what the needs of customers who want to be served (what is being satisfied), (2) where the
customer groups? (who is being satisfied), and (3) what the technology used and the functions
executed to satisfy consumers (how's customer needs are satisfied) just introducing what
product in the company's production is not enough and does not have any meaning. A product
has no meaning in the business if it can meet the needs or desires. No needs no business.
Consumers are relevant because they show that the market served.
Communicating Vision and Mission
Communicating the vision and mission of the subordinate is almost as important as the
preparation of the vision and mission of the company itself because of the vision and mission of
the company that has the vision and mission members (shared vision and mission) can serve as
a tool to motivate and build commitment of employees to carry out any plan of the company.
Managers need to communicate the vision in words that raises strong feelings in order to
achieve organizational goals, build pride working in the company, pushing the extra action and
the ability to exercise control. Control is an attempt to achieve specific objectives through the
expected behavior and avoid unexpected behavior. An organization fails to achieve its
objectives because of the inability and unwillingness of member organizations in working
together. Inability can be improved through education and training. Meanwhile, unwillingness
can be eliminated or reduced by the presence of intense communication between superiors and
subordinates of the vision, mission, and values are believed to be together.
Why Vision and Mission Not Effective
In order to find a powerful vision of the causes of the failure of an organization need to be
discovered so that the leaders will be able to turn it over then formulate the vision and mission
of a powerful true. Here are four reasons why the vision and mission in most organizations are
not effective.
1. Ambiguity sense of vision and mission
First cause of failure of vision and business mission is due to the concept and our understanding
of the vision and mission that is still vague, ambiguous and unclear.
2. Vision and mission are not really desirable
The vision and mission of the company could fail because of the intrinsic, the founder of the
company do not really crave the achievement of that vision.
3. Vision and mission do not represent the suffering and hope

12

The vision and mission should be able to reflect on the suffering and hopes of the organization's
members, causing great spirit - a powerful vision and mission - to make it happen come true.
4. vision and mission is not believed to be achieved
The vision and mission of an organization's enterprise seems doomed to fail if the statement is
regarded as not realistic and difficult to achieve. That is, the statement is not trusted by the
employees.
In order for the vision and mission of the company or an organization lived, felt, and
precipitated by the employee that is written in their hearts, there are five things you need to get
attention, which is as follows.
1. The vision and mission must be made consistent and commensurate with the value system of
the organization (cored shared values)
Aligned means that the vision, mission, and values should be equally ideal and transcendental.
Worth it means the vision, mission, and values must both support each other and compatibility.
2. Commitment
After the vision, mission, and values that are believed to have been formulated together, or the
elite management organization must demonstrate a commitment in its implementation.
3. Communication
Vision and mission and values must be communicated to all employees with a variety of ways
such as training, upgrading, and educational programs that will be a shared vision and mission.
4. Vision and mission inflexible
To be effective, the vision and mission must be dynamic without losing the essence of the ideal
and transcendental. The formulation of the vision and mission should be up to date and describe
our progress towards the vision itself.
5. Vision and mission management system supported by appropriate
Human behavior in organizations can be influenced by a variety of systems and subsystems are
practiced within the organization.
The vision and the mission should have been as follows:
In accordance with the spirit of the times and the spirit of the organization
Compatible with history, culture, and values of the organization
Consistent with the present circumstances
Ability to express a set of standards of excellence or distinctive competence of the
organization and reflect a high ideal
Able to explain the direction and goals of the organization

13

 Has the power of persuasion and able to express hopes, aspirations, sentiment, suffering, and
longing members of the organization
Ability to create tomorrows agenda that sharpens the focus of struggle and promise a brighter
tomorrow
Able to generate enthusiasm and commitment of a true heart
Easy to understand because it is expressed with elegance that can be a guide strategy and
tactical actions
Ability to express the uniqueness of the organization
Contains the norms and values that form the basis for the behavior of members of an
organization that transcends religious differences, ethnic, gender, age, and characteristics of
democracy.
Several examples of the vision and mission of the company

Vision and Mission PT PELNI

vision:
"Being Tough Shipping Company and First Choice Customer"
mission:
1 Manage and develop sea transport in order to ensure the accessibility community to
support the realization of insight archipelago
2 Increase the contribution of revenue for the state, employees and the environment
play a role in the development and service to the community
3Vision,
Increas
mission and objectives of SHELL REFINING COMPANY
e the value
of the company through creativity, innovation, and competence development
Vision
of Human
Resources
To
be the Top
Performing and Most Admired Refinery in Asia
4 Running
a
Missionbusiness fairly with the principles of benefit to all parties involved
(stakeholders),
apply
the principles
of Good Corporate Governance (GCG)
To
continuously and
deliver
shareholder
value by:
Manufacturing and supplying oil products and services that satisfy the needs of our
customers
Constantly achieving operational excellence
Conducting our business in a safe, environmentally sustainable and economically optimum
manner
Employing a diverse, innovative and results-oriented team motivated to deliver excellence
Objectives
We are committed to deliver sustainable excellence in business performance by focusing
on the following:
Benefit our shareholders
Realise the potential of our people
Meet our customer requirements
Maximise refinery margins
Safeguard asset integrity
14
Deliver structural cost reductions
Sustain a robust management system
Deliver continuous sustainable Health, Safety, Security and Environmental excellence

CONCLUSION

Services have become an integral part of the world economy. Over the past decade the
role of services marketing has become a dominant feature in the service industry. The
continuous shift to an information society lead to an increase in service demand from
customers, meaning that organizations no longer regard services as an option but rather
as a necessity to gain a competitive advantage.
A broad definition of services implies that it is originally intangible and relatively
quickly perishable activities whose buying takes place in a process of interaction aimed
at creating customer satisfaction, but during this interactive consumption it does not
always lead to material possession.
Services have five unique characteristics that are not founds in goods, namely
intangibility, inseparability, variability, perishability and ownership. The intangibility
characteristic of services seems to be the dominant one in the definition of services.
These unique characteristics create numerous challenges for service marketers to attract
new customers and retain current customers.
The service marketing triangle and the service mix are but two concepts used to address
the challenges of service marketing. The service marketing triangle focus on three
marketing processes that need to be successfully carried out to ensure service success.
Firstly, external marketing takes place between the organization and the customers and
represents the service promises the organization makes to customers. Secondly,
interactive marketing implies the actual contact between service employees and
customers and represent the fulfilment of the promise made by the organization.
Thirdly, internal marketing enables the service marketer to deliver promises made to
customers and is the result of interaction between the organization and its employees.
The service mix concept has been developed because of the limitation of the traditional
marketing mix components in their application to services. The components of the
service mix are; service offerings, price, distribution, promotions, people, process and
physical evidence. The three new components of the service mix, i.e., people, process
and physical evidence, have the advantage that they can be fully controlled by the
organization.
REFFERENCES

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Kotler, P. (1996). Marketing Management. Singapore: Prentice Hall.

Kotler, P. (2009). Manajemen Pemasaran. Jakarta: Erlangga.
Peppers, D. (2011). Managing Customer Relationship. New Jersey: John Wiley
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Zemke, R. (2001). E service. New York: American Management of
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http://www.studymode.com/essays/Summary-Services-Marketing-1030871.html
http://www.marketing91.com/service-marketing-mix/
http://smallbusiness.chron.com/marketing-triangle-22740.html
http://www.alloutdigital.com/2012/08/what-is-service-marketing-triangle/
https://www.boundless.com/marketing/services-marketing/
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http://www.marketingprofs.com/6/coldren2.asp

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