Unit 2 Mission and Purpose

1. Unit 2 Mission and Purpose

2. Reading

3. Objectives • After studying this unit and related materials you should be able to understand: • vision, mission and objectives • mission types such as profit and growth and quality of life • governance and social responsibility • stakeholders and stakeholder power • and critically evaluate, explain and apply the above concepts.

5. Case Study 2: British Airports Authority

6. BAA’s vision statement for Heathrow airport is to “Become Europe’s hub of choice by making every journey better” Its strategic intents to achieve this vision as follows: Make Heathrow the preferred choice for passengers Improve airport operations every day Succeed through airline success Run our airport responsibly, safely and securely Focus people and teams on service and results Deliver the business plan Transform the airport Win support for our airport vision Case Study 2: British Airports Authority

7. Aims and Missions Many organisations work to a mission statement (David, 1989). A mission statement is a concise expression of what the organisation is trying to achieve and explains what it is in business for Aims, Missions and Objectives

8. Kenya Wildlife Service

9. TUI Travel’s primary strategic objectives are: ● to be one of the world’s leading leisure travel groups by providing customers with a wide choice of products with the flexibility to meet their changing needs; ● to deliver earnings growth and margin expansion through the combination of organic development and selected acquisitions; ● to deliver cost synergies estimated to be at least £100 million (e146 million) per annum on an annualised basis within three years of Completion; ● to maintain a lean and efficient business model; and ● to maximise shareholder value. TUI Travel Strategic Objectives

10. A useful mission statement should have the following characteristics: It should be succinct It should be a future oriented statement It should be an umbrella statement which can cover more detailed objectives It should be realistic and achievable It should describe the main aims of the organisation Mission contd.

11. Objectives spell out the goals that have to be achieved to realise a mission. Thus objectives set out in more detail how a mission is to be achieved. Objectives

12. Closed objectives should conform to SMART principles, that is they should be: specific measurable agreed with those who must attain them realistic, and, time-constrained Open statements are written in more qualitative terms. Missions are generally written as open statements and targets such as "the most successful" are not measurable without further definition. Framing of objectives and missions

13. The aims and missions of organisations can be classified according to a number of types, where classification depends upon the significance of profit as against other aims. The following classification illustrates five main types. Profit-maximisation Tempered profit maximisation Indirect profit maximisation Social aims Organisations in communist states Types of mission

14. Types of Mission

15. Missions may include some of the following aspects Maximising profits Corporate success Customer satisfaction Employee welfare Environmental sensitivity Product safety Employment policy Community activity Ethical considerations Benefits to society Political considerations Mission Types and Mission Agenda

16. Are mission statements are just a good public relations front which put an acceptable face on the cut-throat world of the activities of organisations in modern markets? This view would suggest that cost reduction, and revenue enhancement are the universal unspoken missions of most private sector organisations, but that such a mission would make rather alarming reading. The divorce between ownership and control of large organisations can cause mission conflict Whilst shareholders will favour a mission which generates a good rate of return on their capital, managers (who may not necessarily have a significant shareholding) may actually pursue a different mission which maximise their own benefits, irrespective of the published mission. Thus they may seek remuneration packages, and a series of perks including cars and travel which detract from profitability. Mission and reality

17. Governance is concerned with authority, accountability and responsibility. It describes the rules and ways that determine how an entity is directed and controlled. Good governance exists to ensure that too much power is not vested in one or a few individuals and that the actions of those responsible for controlling entities are subject to proper scrutiny. Governance

18. Where governance defines the ways in which an entity must act in relation to the law and its stakeholders, social responsibility is an area that is more discretionary. It is a commitment to avoid negative impacts and deliver benefits to the wider society in which an entity operates. It is defined by McWilliams and Siegel (2001) as “actions that appear to further some social good, beyond the interests of the firm and that which is required by law.” Social Responsibility

19. The Adventure Company offers worldwide tours based around four themes of Discovery, Wildlife, Adventure and Trekking. It has a well developed Responsible Travel policy which includes the following initiatives: Local group leaders/staff welfare – local group leaders are employed on more than 90% of trips. A porter protection policy is in place. Use local services – by using local transport and as many local businesses as possible, money stays in-country and local enterprise is encouraged. Everyone who travels with the company gets a copy of its Responsible Travel policy It audits all of its trips to ensure their environmental impact is minimised. 55% of the company’s trips support a local project. Examples include a school in India and a community centre in Tanzania. The company offsets all staff carbon emissions from work-related flights and travel to work, and also office-generated emissions. The suppliers we use by the company and the practices adopted in its offices are constantly reviewed. Source: www.adventurecompany.co.uk/responsible-travel.aspx Social Responsibility:The Adventure Company

20. Stakeholder analysis (Friedman et al., 2002)is a useful way of identifying the variety of different forces that act on an organisation's mission. The term stakeholder refers to a person or grouping with an interest in the operation of a particular organisation. Stakeholders

21. Stakeholder Mapping: BAA

22. Stakeholder Conflict: BAA

23. Interest alone is insufficient to explain the relative influence of stakeholder groups on mission. We need to add another dimension - that of stakeholder power - to get the full picture of stakeholder influence (Mendelow 1991). Competing stakeholder groupings for BAA Stakeholder Power

24. internal stakeholders' power is enhanced by: position in hierarchy charisma comprehensive intelligence about the organisation specialist knowledge patronage control of resources formation of coalitions external stakeholders power is enhanced by: control of resources (e.g. finance) constitutional role (e.g. shareholders voting rights) public relations skills control of distribution links (e.g. outlets) formation of coalitions Internal and External Stakeholders

25. Vision: signals what an entity would like to become. Mission: sets out in more concrete terms the general aims of an entity, what it is trying to achieve and what it is in existence for. Objectives: spell out the goals that have to be achieved to realise a mission. SMART objectives: should be specific, measurable, agreed with those who must attain them, realistic and time-constrained. Governance: describes the rules that determine how an entity is directed and controlled to discharge its responsibilities to its owners and to the law. Social Responsibility: actions that appear to further some social good, beyond the interests of the firm and that which is required by law. Stakeholder: person or grouping with an interest in the operation of a particular entity. Stakeholder Power: the ability to influence policy. Review of Key Terms

26. Distinguish between vision, mission and objectives for a named tourism entity. What are SMART objectives and what makes them SMART? Distinguish between governance and social responsibility for a tourism entity. What is the difference between shareholders and stakeholders? Distinguish between external and internal stakeholders. What are the main sources of power for each? Discussion Questions

27. Unit 2 Mission and Purpose The End