Introduction to Finance

Mission, Objectives, Goals, and Strategies 
(MOGS)
develops project plans that fi t well with a fi rm’s plans. Under this strategy, the fi rm’s 
managers fi rst develop the fi rm’s mission—its reason for being. Once developed, objectives 
can be formed (for example, to have the highest rating for product quality in its industry). 
mutually exclusive projects 
a 
project that, when selected, precludes 
others from being undertaken
independent projects 
projects 
not in direct competition with one 
another
net present value 
present value of 
a project’s cash fl ows minus its cost
mission, objectives, goals, and 
strategies (MOGS) 
corporate 
planning tool that aids in 
developing project plans that fi t 
well with a fi rm’s plans

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17.1 Mission, Vision, and Capital Budgeting
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Then, goals based upon the objectives are stated (for example, to receive industry association 
innovation awards by 2019 and earn the highest industry ranking in quality by 2022). Finally, 
managers develop strategies to try to achieve the goals, such as new product features or innov-
ative technology off erings. A fi rm should have a MOGS plan, or something similar to it, in 
place to give direction to company planning and to help the fi rm’s offi
cers identify potential 
capital budgeting projects.
Managers defi ne and redefi ne the fi rm’s mission, objectives, goals, and strategies over 
time, as part of the long-term plan. This long-term plan provides a foundation for the next 
fi ve to ten years of operating plans for the fi rm. The long-term plan is operationalized, or 
implemented, in the annual capital budget. To develop the capital budget, managers must fi nd 
investment opportunities that are suitable to the overall strategic objectives of the fi rm; its 
position within the various markets it serves; the government fi scal, monetary, and tax policies; 
and the leadership of the fi rm’s management. Attractive capital budgeting projects take the 
fi rm from its present position to a desired future market position and, as a consequence, main-
tain or increase its shareholders’ wealth.
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