Key Terms in Strategic Management
Rex C. Mitchell, Ph.D.

As we use our ongoing three-phase strategic management process of diagnosis, formulation, and implementation, we deal with several interrelated components: mission, corporate values and philosophy, goals and objectives, critical issues, and strategies. Let's review what these terms mean.


The organization's mission is its purpose, its reason for being. It should describe the organization's major areas of interest, the scope of its intended actions, the basic needs it intends to satisfy - for whom and in what ways, and possibly some of its primary values. It should provide the organization with an overall sense of purpose and provide long-term direction. Often, the mission statement will be elaborated with separate statements of company values, principles, and philosophy, plus broad strategic goals that identify key results areas for the organization. A mission statement may remain unchanged for many years.

A few examples of mission statements are:

The final form of mission statements is usually deceptively simple and general. However, the extensive discussion and work that goes into developing a good mission statement are very valuable for the participants.

It usually is not particularly useful for subdivisions within an organization to develop separate mission statements. Their contribution to and elaboration of the mission of the overall organization is best carried out by participation in dealing with the following components.


Setting objectives converts the mission and broad direction of the organization into more definitive and specific statements of what will be accomplished. Both broad and specific objectives, and both long-range and shorter-range objectives, are needed.

Although many writers like to distinguish between goals and objectives, they do not agree on the distinction, resulting in total confusion in the literature with some putting each as the larger category. For example, some people like to speak of "goals" as broad, strategic statements, and then speak of "objectives" as more specific performance results to be attained; others reverse the hierarchy of these two terms. Therefore, I do not make a distinction between the two terms, and recognize that there are at least three dimensions that define the range of objectives needed in an organization: (a) broad through specific objectives, (b) short through long-range, and (c) a hierarchy of objectives, from overall corporate objectives through objectives through objectives for the smallest organizational subdivision and on to individual objectives. It is vital to integrate objectives across these three dimensions, and also across divisions in the company to avoid sub-optimization.

Examples of broad objectives are:

Examples of more specific objectives are:

It is vital to integrate objectives across the three dimensions mentioned above, including integration of objectives at various levels in the hierarchy, and to eliminate inconsistencies and conflicts among objectives. Three questions that can help in this integration are (to be asked by each management individual as she/he sets objectives):

It is important to define objectives in terms of results and outcomes, not activities. As a manager develops objectives, including dealing with the three questions in the previous paragraph, it helpful to keep these points in mind:

It is helpful to put objectives in writing, framed as positive results to be achieved rather than problems to be avoided, and stated in observable behavioral terms - usually with performance indicators and time-frames.


Critical issues are a small number (typically 2 to 5) of issues that should receive particularly high priority attention from the management of the organization at this time. They are critical and deserving of this unique, high-priority attention because they are threats, problems, or opportunities that will have a major impact on the organization's survival and/or success. They often are issues that define major barriers to achieving key organization objectives. Some examples of critical issues:

It is important to frame the critical issues as issues, rather than as the actions to be taken or solutions to an issue.

In contrast to objectives, which tend to be set at regular intervals and are often connected to budgeting and planning processes, the set of critical issues is a dynamic list that is kept current at all times, with issues falling off the list as they are no longer "critical," and others added as they become "critical."


Strategies are the ways the organization will achieve its objectives, considering its present situation and critical issues. Objectives are the "ends," and strategies are the "means" of accomplishing them.

Crafting strategies is an ongoing effort. While an organization's mission and long-term objectives may remain unchanged for several years, strategy is always evolving, partly to respond to ever-changing events in the external environment, partly from proactive efforts of managers to create new opportunities, and partly from fresh ideas about how to make the strategies work better. Strategy-making thus proceeds on two fronts -- one proactively thought through in advance, the other conceived in response to new developments, special opportunities, and experience with the successes and failures of prior strategic actions.

It is useful to think of strategies on three levels; these sets of strategies must be internally consistent and fit together in a mutually supportive manner that forms an integrated hierarchy of strategy:

Example of a general, long-term strategy:

Examples of more specific strategies:


Here are some of the other major concepts and terms that you need to learn/relearn or sharpen your understanding of their meanings in order to deal with strategic management and this course. Although we will encounter and deal with them during the course, it will help you to review them at least initially during the first couple of weeks of the course. You need to go beyond memorizing textbook definitions to understand what they mean in terms of real organizations.

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Last modified July 20, 2009 Copyright 1997-2009 Rex Mitchell