Mission statement

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A mission statement is a short statement of why an organization exists, what its overall goal is, identifying the goal of its operations: what kind of product or service it provides, its primary customers or market, and its geographical region of operation. [1] [2] It may include a short statement of such fundamental matters as the organization's values or philosophies, a business's main competitive advantages, or a desired future state—the "vision". [1] [3]

Market (economics) Mechanisms whereby supply and demand confront each other and deals are made, involving places, processes and institutions in which exchanges occur.

A market is one of the many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers. It can be said that a market is the process by which the prices of goods and services are established. Markets facilitate trade and enable the distribution and resource allocation in a society. Markets allow any trade-able item to be evaluated and priced. A market emerges more or less spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of rights of services and goods. Markets generally supplant gift economies and are often held in place through rules and customs, such as a booth fee, competitive pricing, and source of goods for sale.

Contents

A mission is not simply a description of an organization by an external party, but an expression, made by its leaders, of their desires and intent for the organization. The purpose of a mission statement is to communicate the organisation's purpose and direction to its employees, customers, vendors, and other stakeholders. A mission statement also creates a sense of identity for its employees. Organizations normally do not change their mission statements over time, since they define their continuous, ongoing purpose and focus. [4]

According to Chris Bart, professor of strategy and governance at McMaster University, [5] a commercial mission statement consists of three essential components: [6] [ failed verification ]

Chris Bart is an educator, former university professor, professional speaker, business consultant and author. He is a notable authority on organizational mission and vision statements, and also for his knowledge both on the roles and responsibilities of corporate directors and the strategic governance of for-profit and not-for-profit organizations.

McMaster University public research university in Hamilton, Ontario, Canada

McMaster University is a public research university in Hamilton, Ontario, Canada. The main McMaster campus is on 121 hectares of land near the residential neighbourhoods of Ainslie Wood and Westdale, adjacent to the Royal Botanical Gardens. It operates six academic faculties: the DeGroote School of Business, Engineering, Health Sciences, Humanities, Social Science, and Science. It is a member of the U15, a group of research-intensive universities in Canada.

  1. Key market: the target audience
  2. Contribution: the product or service
  3. Distinction: what makes the product unique or why the audience should buy it over another

Bart estimates that in practice, only about ten percent of mission statements say something meaningful. [5] For this reason, they are widely regarded with contempt. [6]

Purpose

The sole purpose of a mission statement is to serve as a company's goal/agenda, it outlines clearly what the goal is. Some generic examples of mission statements would be, "To provide the best service possible within the banking sector for our customers." or "To provide the best experience for all of our customers." The reason why businesses make use of mission statements is to make it clear what they look to achieve as an organization, not only to themselves and their employees but to the customers and other people who are a part of the business, such as shareholders. As a company evolves, so will their mission statement. This is to make sure that the company remains on track and to ensure that the mission statement does not lose its touch and become boring or stale.

It is important that a mission statement is not confused with a vision statement. As discussed earlier, the main purpose of a mission statement is to get across the ambitions of an organisation in a short and simple fashion; it is not necessary to go into detail for the mission statement which is evident in examples given. The reason why it is important that a mission statement and vision statement are not confused is because they both serve different purposes. Vision statements tend to be more related to strategic planning and lean more towards discussing where a company aims to be in the future.

Vision statement

A vision statement is a declaration of an organization's objectives, intended to guide its internal decision-making. A vision statement is not limited to business organizations and may also be used by non-profit or governmental entities.

Advantages

Provides direction: Mission statements are a way to direct a business into the right path. They play a part in helping the business make better decisions which can be beneficial to them. Without the mission statement providing direction, businesses may struggle when it comes to making decisions and planning for the future. This is why providing direction could be considered one of the most advantageous points of a mission statement.

Clear purpose: Having a clear purpose can remove any potential ambiguities that may surround the existence of a business. People who are interested in the progression of the business, such as stakeholders, will want to know that the business is making the right choices and progressing more towards achieving their goals, which will help to remove any doubt the stakeholders may have in the business.

In a corporation, a stakeholder is a member of "groups without whose support the organization would cease to exist", as defined in the first usage of the word in a 1963 internal memorandum at the Stanford Research Institute. The theory was later developed and championed by R. Edward Freeman in the 1980s. Since then it has gained wide acceptance in business practice and in theorizing relating to strategic management, corporate governance, business purpose and corporate social responsibility (CSR).The definition of corporate responsibilities through a classification of stakeholders to consider has been criticised as creating a false dichotomy between the "shareholder model" and the "stakeholders model" or a false analogy of the obligations towards shareholders and other interested parties.

A mission statement can act as a motivational tool within an organisation, and it can allow employees to all work towards one common goal that benefits both the organisation and themselves. This can help with factors such as employee satisfaction and productivity. It is important that employees feel a sense of purpose. Giving them this sense of purpose will allow them to focus more on their daily tasks and help them realise the goals of the organisation and their role. [7] [8]

Disadvantages

Although it is mostly beneficial for a business to craft a good mission statement, there are some situations where a mission statement can be considered pointless or not useful to a business.

Unrealistic: In most cases, mission statements turn out to be unrealistic and far too optimistic. An unrealistic mission statement can also affect the performance and morale of the employees within the workplace. This is because an unrealistic mission statement would reduce the likelihood of employees being able to meet this standard which could demotivate employees in the long term. Unrealistic mission statements also serve no purpose and can be considered a waste of management's time. Another issue which could arise from an unrealistic mission statement is that poor decisions could be made in an attempt to achieve this goal which has the potential to harm the business and be seen as a waste of both time and resources.

Waste of time and resources: Mission statements require planning. This takes time and effort for those who are responsible for creating the mission statement. If the mission statement is not achieved, then the process of creating the mission statement could be seen as a waste of time for all of the people involved. A lot of thought and time can be spent in designing a good mission statement, and to have all of that time wasted is not what businesses can afford. The wasted time could have been spent on much more important tasks within the organisation such as decision-making for the business.

Design

According to an independent contributor to Forbes, the following questions must be answered in the mission statement: [9]

When designing a mission statement, it should be very clear to the audience what the purpose of it is. It is ideal for a business to be able to communicate their mission, goals and objectives to the reader without including any unnecessary information through the mission statement. [10]

US Federal Emergency Management Agency's Mission Statement Poster FEMA - 44805 - FEMA Mission Statement posted at a Joint Field Office in TN.jpg
US Federal Emergency Management Agency's Mission Statement Poster

Richard Branson has commented on ways of crafting a good mission statement; he explains the importance of having a mission statement that is clear and straight to the point and does not contain unnecessary baffling. He went on to analyse a mission statement, using Yahoo's mission statement at the time (2013) as an example. In his evaluation of the mission statement, he seemed to suggest that while the statement sounded interesting, most people would not be able to understand the message it is putting across. In other words the message of the mission statement potentially meant nothing to the audience. [11]

See also

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References

  1. 1 2 "Mission Statement". Small Business Encyclopedia. Entrepreneur Media, Inc. 2017. Retrieved 2015-11-01.
  2. Gibson, C. Kendrick; Newton, David J.; Cochran, Daniel S. (1992). "An empirical investigation of the nature of hospital mission statements". In Brown, Montague (ed.). Health Care Management: Strategy, Structure, and Process. Health Care Management Review Series. Gaithersburg, MD: Aspen Publishers. pp. 47–58. ISBN   978-0-8342-0299-3. OCLC   25281735 . Retrieved 2017-04-13 via Google Books. A frequently quoted definition of a mission statement is that it ‘is a broadly defined but enduring statement of purpose that distinguishes the organization from others of its type and identifies the scope of its operations in product (service) and market terms.’
  3. Hill, Charles; Jones, Gareth (2008). "Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage". Strategic Management: An Integrated Approach (8th ed.). Mason, OH: South-Western Educational Publishing. p.  11. ISBN   978-0-618-89469-7. OCLC   238715134 via Google Books.
  4. "What is a mission statement? definition and meaning". BusinessDictionary. WebFinance Inc. Retrieved 27 October 2015.
  5. 1 2 Holland, Kelley (23 September 2007). "In Mission Statements, Bizspeak and Bromides". Job Market: Under New Management. New York Times (New York ed.). p. 317.
  6. 1 2 Bart, Christopher K. (November–December 1997). "Sex, Lies, and Mission Statements". Business Horizons. 40 (6): 9–18. doi:10.1016/S0007-6813(97)90062-8. SSRN   716542 .
  7. "Benefits of Vision and Mission Statements". Clearlogic Consulting Professionals. 2013. Retrieved 2015-11-01.
  8. Vozar, Roger (1 June 2013). "How organizations benefit from having a clearly defined mission". Smart Business Magazine. Smart Business Network Inc. Retrieved 2015-11-02.
  9. Hull, Patrick (10 January 2013). "Answer 4 Questions to Get a Great Mission Statement". Forbes. Forbes Media, LLC. Retrieved 2015-11-02.
  10. "How to Write Your Mission Statement". Entrepreneur. Entrepreneur Media, Inc. 30 October 2003. Retrieved 2015-11-02.
  11. Branson, Richard (22 July 2013). "Richard Branson on Crafting Your Mission Statement". Entrepreneur. Entrepreneur Media, Inc. Archived from the original on 23 October 2015. Retrieved 2015-11-02.
  12. Thompson, Andrew (20 August 2015). "Google's Vision Statement & Mission Statement". Panmore Institute. Archived from the original on 13 November 2015. Retrieved 2015-11-02.