MGT Notes

Reference: Strategic Management (5e) – Frank T. Rothaermel (Pg 46)

In addition to Vision and Mission Statements, an entity needs to also clearly articulate its values. This is done through a Core Values Statement that reflects company culture and allows everyone in the firm to manage complexity, resolve conflict and gives them a moral compass to look towards in difficult situations.

In many instances, unethical behavior may not be illegal. Therefore it is imperative to establish extra-legal ethical standards to instill desired behavior.

A Values Statement outlines organizational core values and aims to establish ethical standards and norms. These underlay the vision statement and provide stability to the company’s strategy. While the firm is pursuing its Vision & Mission at full speed, the Values form much needed guardrails to keep the company on track by enabling it to make ethical and effective choices.

If there is no meaningful involvement by leadership, the Values Statement degenerates into a Public-Relations exercise, since employees tend to follow a leader’s behavior. Strategic leaders live a firm’s core values.

Thus stating an entity’s Vision, Mission and Values form the first step of the Strategic Management Process.