The First Step in Strategic Management Process - Vision & Mission

Essay by pepitaliang March 2009

download word file, 8 pages 3.0

AbstractStrategic Management is the process of decision making that helps ensure the organization's internal capability is in alignment with the opportunities and threats it faces in its environment. When planned and implemented properly, strategic management can establishcritical direction and guides the allocation of resources to achieve long-term organizational objectives.

Before an organization can focus on the strategic management of its objectives, there mustbe a vision and mission. According to David, a vision statement directs the association toward future goal or achievement in the long term and provides the foundation for developing a mission statement. An organization's mission is referred to its reasons for existence, and reflects the organization's basic purpose as a supplier of goods and/or services (David, 2009, p.83). It guidescurrent, critical and strategic decision making. The mission statement is a crucial element in the strategic management of a business organization. It serves as a building block for the development of more specific functional strategies.

The purpose of the paper is to examine how Caterpillar translates its mission statement into performance objectives and makes its strategies and operations remain consistent with the mission statement.

BackgroundCaterpillar Inc. is the world's leading manufacturer of construction and mining equipment,diesel and natural gas engines and industrial gas turbines. The company prides itself on its innovative technology and diversification in products and services such as construction, mining, transportation, forestry, energy, logistics, electronics, financing and electric power generation.

Ranking 50 of Fortune 500 this year, Caterpillar recently reported revenues exceeding 44.9 billion dollars (CNN Money, 2008). It is a U.S. based competitor with more than $30 billion in assets. Its state-of-the-art technology and diversification in products and services enabled thecompany to dominate the industry for more than fifty years.

Caterpillar's Vision & MissionCaterpillar has both a vision and a mission to guide their company. The...