The mission should define the organization line/lines of business, identify its products and services, and specify the markets it serves at present and in the near future. It should be achievable, in writing, and have a time frame for achievement. An organization’s mission is formulated in the form of a statement. It is, therefore, often called a mission statement. A mission is an overall goal of the organization that provides a sense of direction and a guide to decision-making for all management levels.
A mission can also be defined as a broad goal of an organization that justifies an organization’s existence. It is a statement of an organization’s reason to exist. It states what the company is providing to society.
For example, a company may provide a service such as legal services, house cleaning, or software development. Or, it may provide a product such as cosmetics or toiletry.
An organization’s mission does not indicate the details and measurable targets. It rather contains a statement of attitude, outlook, and orientation. A mission statement reveals who the company is and what it does. It clarifies the nature of existing products, markets, and functions the firm presently provides.
Since a mission is a relatively permanent part of an organization’s identity, it should be broad-based but customer-focused.
The mission is not to make a profit. It is to give the organization its own special identity, business emphasis, and path for development.
It must set a company apart from other similarly situated companies. If profit is made the focus of the mission, it will be impossible to differentiate one company from another.
Definition of Company Mission
A mission statement is a statement of the purpose of the organization.
It describes what it wants to accomplish in the larger environment. Conventionally, companies have defined their businesses in product terms, such as we manufacture carpenter’s tools or technological terms, such as we are engaged in fruit processing.
But pragmatically speaking, mission statements should be market-oriented.
A market-oriented mission statement defines the business in terms of satisfying basic customer needs.2 Thus, ACME does something more than producing medicines. It applies science to solve health problems.
In defining the company mission, management should keep in mind certain important considerations. The mission should not be too narrow or too broad. Missions should be realistic and specific. Missions should be compatible with the environment prevailing in the market.
A company’s mission should highlight skills that distinguish it from other companies. Finally, mission statements should be motivating for the employees and customers.
Missions are best when guided by a vision, an almost “impossible dream.” Sony’s president, Akio Morita, wanted everyone to have access to “personal portable sound,” and his company created the Walkman.
The company’s mission statement should provide a vision and direction for the company for a reasonably long period – one to two decades. The company must review and redefine its mission from time to time to fit the dynamic business environment.
Characteristics of a Good Mission Statement
There are three major characteristics of a good mission statement. They are mentioned below:
- A limited number of goals are considered in good mission statements. For example, a good mission will not state “the company wants to produce lowest-cost items, provide state-of-the-art service, distribute globally, and produce very high-quality products.” Because quite a number of goals are focused here, which are very difficult, not impossible to attain. A good mission will rather focus on one or two, i.e., a limited number of attainable goals.
- They emphasize on the major policies and values of the company. A company may follow different policies with regard to different aspects. It may have policies dealing with the creditors, debtors, shareholders, and so on. Policies help management save a lot of its valuable time deciding on different issues by providing standard decisions.
- Companies operate within different competitive scopes, and good mission statements highlight on those.
Elements that Shape a Company’s Mission
There are five elements that shape a company’s mission;
- Current Preferences of the Owners and Management.
- The Market Environment.
- Distinctive Competencies.
Mission, first of all, is determined based on the company’s history or past records of aims, policies, and achievements, and companies usually do not deviate from their history to preserve images.
Current Preferences of the Owners and Management
The intention and attitudes of management also shape a company’s mission. If the intention of management changes, it will impact its(company) mission statement.
The Market Environment
Changes in the company’s market environment will also influence its mission statement. Mission changes as the environment change. If a company does not adapt itself to the changes, it will run out of the market.
To attain a mission, a company needs resources such as man, money, machine, etc.
While stating the mission, management takes into account the resources it has. For example, a tiny local company should not have a mission of becoming Asia’s largest company in its field.
A company may be excellent in one or a few areas of business, not in everything.
It means that it can do certain things efficiently than others. Areas where the company does an excellent job, are its distinctive competencies. A company’s mission should be based on such competencies, not on areas where it lacks such excellence.
If the mission is based on the above, it increases employees’ motivation and thus increases efficiency and productivity.
Ideal Contents of a Mission Statement
There does not exist any hard and fast rule for formulating a mission statement.
An analysis of various mission statements of different companies (especially business-oriented firms) indicates that a mission statement needs to include some common issues, such as:
- Customer needs (i.e., what is being satisfied)
- Customer groups (i.e., who is being satisfied)
- Company’s activities, technologies, and competencies (i.e., how the company goes about creating value for customers and satisfying their needs)
Pearce and David identified eight basic components of a typical corporate mission statement as follows:
- Target customers and markets (e.g., students, engineers, doctors, nurses, patients)
- Products or services (e.g., toothpaste, perfume, computer)
- Geographical domain (e.g., national level, worldwide)
- Technology (e.g., cellular communication technology; information technology)
- Concern for survival (e.g., to conduct business prudently to provide profits and growth)
- Philosophy (e.g., a spirit of sharing and caring where people give cheerfully of their time, knowledge, and experience)
- Company’s self-concept (e.g., a diversified, multi-industry company) and
- Concern for public image (e.g., to share the world’s obligation for the protection of the environment).
Setting Company Objectives and Goals based on mission
The company’s mission has to be transformed into detailed supporting objectives for each level of management. Each manager should have objectives and be responsible for accomplishing them.
For example, Zia Fertilizer Factory (ZFF) is in the business of producing and marketing of fertilizers. ZFF does not say that its mission is to produce fertilizer. Instead, it claims that its mission is to “increase agricultural productivity.”
This mission leads to business objectives and marketing objectives. The mission of increasing agricultural productivity leads to the company’s business objective of researching new fertilizers that would increase output. But research needs funds which may come through increased profits.
Therefore, increasing profits becomes another important business objective.
Profits can be increased either by increasing sales or reducing costs, or both. Sales can be enhanced by improving the company’s share of the domestic market, by entering foreign markets, or both. These goals then become ZFF’s current marketing objectives.
Marketing strategies must be evolved to attain marketing objectives. To increase the domestic market share, ZFF may increase its product’s availability and promotion.
To launch its products in new foreign markets, ZFF may decide to cut prices and target large farms abroad. These constitute ZFF’s broad marketing strategies. Now, each broad marketing strategy must be defined in detail.
For example, increasing product promotion may call for more salespeople and more advertising, in which case these requirements will have to be clearly specified. Through this process, the company’s mission is transformed into a set of objectives for the current period. The objective should be clear and specific.
Product-oriented versus Market-oriented Business Definitions
|Company||Product-Oriented Definition||Market-Oriented Definition|
|Revlon||We make cosmetics.||We sell lifestyle and self-expression, success and status, memories, hopes, and dreams.|
|Disney||We run theme parks.||We create fantasies—a place where America still works the way it’s supposed to.|
|Wal-Mart||We run discount stores.||We deliver value through low prices to Middle Americans.|
|Xerox||We make copying, fax, and other office machines.||We make businesses more productive by helping them scan, store, retrieve, revise, distribute, print, and publish documents.|
|O. M. Scott||We sell grass seed and fertilizer.||We deliver green, healthy-looking yards.|
|Home Depot||We sell tools and home repair and improvement items.||We provide advice and solutions that transform ham-handed homeowners into Mr. and Mrs. Fixits.|
|Amazon.com||We sell books, videos, CDs, toys, consumer electronics, home improvement items, and other products.||We make the Internet buying experience fast, easy, and enjoyable—we’re the place where you can find and discover anything you want to buy online.|
|Ritz-Carlton Hotels||We rent rooms.||We create the Ritz-Carlton experience—one which enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.|
Examples of Mission Statements of Various Organizations
|From the beginning, our mission has been to organize the world’s information and make it universally accessible and useful. Today, people around the world turn to Search to find information, learn about topics of interest, and make important decisions. We consider it a privilege to be able to help. As technology continues to evolve, our commitment will always be the same: helping everyone find the information they need.|
|Microsoft||To empower every person and every organization on the planet to achieve more.|
|Apple Computer||To bring the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2009, Tim Cook set the vision specified as “We believe that we are on the face of the earth to make great products and that’s not changing|
|Intel||Delight our customers, employees, and shareholders by relentlessly delivering the platform and technology advancements that become essential to the way we work and live.|
Can there be a mission for functional departments?
There can be separate mission statements for departments like Marketing, Finance, Human Resources, Research, and Development (R & D), etc.
For example, the Human Resources Department’s mission can be “to contribute to organizational success by developing effective leaders, creating high-performance teams, and maximizing the potential of individuals.”
The marketing department’s mission may be ‘providing excellent customer service all the time around the year to exceed the customers’ expectations.’
Why is ‘business definition’ considered essential for a mission statement?
Before a mission statement is prepared, managers must clearly define what business the company is presently in. This is essential because the mission statement must convey “who we are, what we do, and where we are now.”
Thompson and Strickland have very articulately presented the complexity of defining a business:
- Is Coca-Cola in the soft-drink business?
- Is Coca-Cola in the beverage business?
Taking a soft-drink perspective means that managements’ strategic attention needs to be concentrated on outcompeting Pepsi, 7-up, Dr. Pepper, etc.
On the other hand, taking a beverage perspective means that management also needs to think strategically about positioning CocaCola products to compete against fruit juices, iced tea, bottled water, milk, and coffee.
Some companies are found to have provided a broad definition of mission, while some other companies prefer a narrow definition. The broad definition makes a mission statement too abstract to be well-understood. Take this example: “Our Furnishing Company is in the furniture business.’
The company is, in fact, involved in a wooden furniture business.
If it claims in its mission statement that it is in the ‘furniture business,’ then it implies that the company is also engaged in wrought-iron furniture, steel furniture, and plastic furniture businesses. If a company states that it is in the soft-drink business, not in the beverage business, it implies that it follows a narrow definition of business.
In general, three dimensions can be used to define the business of a company. Abell has suggested these dimensions for defining the business.
3 dimensions are:
- Who is being satisfied?
- What is being satisfied?
- How are customers’ needs being satisfied?
These three dimensions indicate that the business definition needs to incorporate the customer groups targeted by the company, the needs of the customers that the company wants to satisfy, and the skills or competencies that the company has to use for satisfying the needs of targeted customer groups.
Can the mission be changed or revised?
In this world of continuous changes in the environment, it is common to redefine companies’ missions periodically.
Sometimes, the original mission formulated long ago does not work due to some reasons – it may become unacceptable to the stakeholders.
In that case, the mission should be modified or altogether created anew.
Communicating the Vision and Mission
To enlist employee commitment, the vision needs to be communicated to all employees. People need to believe that the company’s management knows where it is trying to take the company.
Management should present the vision and mission in language that creates a vivid image in the employee’s heads and provokes emotion.
For example, building a mosque or church is more inspiring than ‘laying the foundation stone.’ The language of vision and mission should be so succinct and specific that it can pin down the organization’s real business arena.
Effective mission statements are those who can inspire all stakeholders. An inspiring and challenging mission statement can serve as a powerful motivational tool. A company should communicate their mission in words that convey a sense of an organization’s purpose.
A well-communicated mission statement pays off in several ways;
- it motivates all key stakeholders to develop firm commitment in themselves for the realization of the organization’s purpose;
- it facilitates focused decision making;
- it helps departmental managers develop missions for departments, set departmental objectives and formulate departmental strategies; and
- it creates a sense of pride in the employees.
Integration of Vision and Mission: To Be or Not to Be?
Because of the closeness of the essence of both vision and mission, some people raise the question: should vision and mission be integrated and formulated together without any separation?
The question is simple, but the answer is difficult.
Generally, we can say that some organizations are found to have integrated these two into one. They have formulated a vision and mission together with no demarcation line between the two.
Hill and Jones did not make any distinction between vision and mission.
They are in favor of using these two terms interchangeably.
The first step in the strategic process is to establish a comprehensive mission or purpose for the firm. Top executives carry out this phase of planning, where marketing personnel plays an advisory role.
Every firm we know operates to achieve the goal (s). When a firm is just starting out, management’s mission is often simply to produce and market a single product or service. As it grows larger and broadens its product line, however, the original image of the firm can become lost and diffused.
Moreover, market conditions may change, and the introduction of new competitive products can make the initial purpose obsolete. When it happens, it is time to renew the search for a mission. Most organizations start with a limited purpose and expand it as they grow.