The Corporate Mission Statement

Published Date: 02 Nov 2017

Today's business environment is becoming increasingly complex and ever-changing; companies must face them every day. Therefore, they bring great difficulties for strategy making. Enterprises are able to get lost in the complex and volatile business environment in the direction of development easily and miss the opportunity. A corporate mission statement is the basis of the corporate strategic decision-making and strategic activities. "Profitability is the main goal of a business organization. No matter how it is measured or defined, profit over the long term is accepted as the clearest indication of the organization’s ability to satisfy the principal claims and desires of employees and stockholders". (John W. Graham and Wendy C. Havlick, 1994) If an enterprise has a clear mission statement, we can provide enterprises with clear development goals, so that enterprises will not be disoriented in the competition, as well as give new management driving force for the enterprise.

The mission statement has been recognized as a tool, becomes a foundation of making strategic decisions and developing activities for an enterprise. At the same time, also plays an internal guidance role of the enterprise employees’ behavior. Currently, more and more scholars and entrepreneurs are clearly recognized that an organization will be crippled without developing and implementing a clear mission. Often the mission is why an organization was first created, to meet a need identified years ago.

The establishment of a mission statement is the first step of establishing an enterprise, because the mission statement conveys goals and ideas. For employees, they are "much more likely to be motivated if they understand the bigger picture defined in the mission statement. If they know that their hours on the job are part of the corporate goal of creating a thriving business, providing services or whatever the mission might be, the employees are more likely to work hard and to be dedicated to the job. The mission statement creates an atmosphere of teamwork toward a common goal." (Kristen May, 2012) For managers, strategies will be established and implemented based on the mission statement. Mission is the most important reason for the existence of an enterprise. It provides some information about why an enterprise exists and its activities range. The mission statement is defined as the persistent statement of the purpose of the business; it distinguishes the difference between an organization and other similar organizations.

Under some circumstances, an enterprise is not defined by its name, articles of association or ordinances, but by its mission. An enterprise will be possible to formulate a clear and realistic enterprise target only with the clear mission and purpose. As for the establishment and management of an organization, must set the programmatic basic idea. Each one of the great enterprise founders has the clear idea about the enterprise and theory to guide their actions and to make decisions, rather than by their instinct to run.

Management master Peter Drucker pointed out that an enterprise must define the purpose and mission clearly. And there are three classical questions: "Who are we? What we should do now? What we should do in the future? "As a formal document, the mission statement should answer three key questions: what are the opportunities or needs that we exist to address? (The purpose of the organization), what are we doing to address these needs? (The business of the organization), what principles or beliefs guide our work? (The values of the organization)

Examples

"The mission of Big Brother/Big Sister of America is to make a positive difference in the lives of children and youth, primarily through a professionally-supported, one-to-one relationship with a caring adult, and to assist them in achieving their highest potential as they grow to become confident, competent, and caring individuals, by providing committed volunteers, national leadership and standards of excellence.

The purpose: to make a positive difference in the lives of children and youth so that they will achieve their highest potential.

The business: providing and supporting committed volunteers who have one-to-one relationships with children and youth.

The value: individuals who are confident, competent, and caring; leadership and standards of excellence."(Janel M. Radtke, 1998)

First of all, the mission statement should illustrate the scope of business and market position of an enterprise. If we define "mission" as "business", and discuss the business of an enterprise. That is to say "what is the mission for an enterprise?" The mission of a company is a basic purpose, which can describe the specific type of the enterprise and its unique product and market range. It can be distinguished with other enterprise. The mission statement is intent to seize the unique purpose and actual activities of a business. The corporate mission statement makes employees and the public understand the reasons for existence of the business and the company's future direction.

A clear mission statement should define the enterprise and illustrate its pursuit and desire clearly, and not just a statement of the current business. Helping to produce a variety of feasible goals and strategies and avoiding inhibiting the creativity of enterprise unduly. Its contents cannot be so particular that to limit the potential of the enterprise. It should be wide enough to enable an enterprise to grow creatively. In order to cater the different stakeholders, the mission statement is often in general terms. It must be distinguished the enterprise from others. "Whilst a mission statement may show the general purpose of the business and indeed may inspire those who read it, it does not itself necessarily provide much practical use to managers. A firm's mission really needs to be turned into something more focused and less general." (Gillespie, 2007) It must contains measurable targets that can evaluate the current business and in the future as a benchmark. It should be described clearly and can be understood widely in the organization.

In short, "the mission describes the organization’s product, service, market, and technology in a way that reflects the values and priorities of the strategic decision makers." (John W.Graham and Wendy C.Havlick, 1994).

"A business that is just starting should use its general mission statement to guide what the structure of the business looks like. The business needs to be structured in a way that makes it possible to accomplish the goals set out in the mission statement."(Kristen May, 2012) For example, the mission statement of ExxonMobil Corporation, "Exxon Mobil Corporation is committed to being the world's premier petroleum and petrochemical company. To that end, we must continuously achieve superior financial and operating results while simultaneously adhering to high ethical standards."(Exxon Mobil Corporation.2012) By positive development of promising new products, new technologies and new processes, ExxonMobil always walk in the forefront of the development of science and technology. ExxonMobil established more than 20 large research and engineering centers. There are more than 1500 PhD to engage in scientific research and development. Moreover, by configuring a number of small institutes and technical service network, ExxonMobil forms a global network of research and development. When managers analyze strategic opportunities, the mission can help they find opportunities for development in the future. Because of in a dynamic and competitive business environment, there are many new opportunities and threats. When an enterprise becomes more competitive, and the external environment is suitable for enterprise development, the company needs to make some changes to gain greater competitive advantage. At this time, managers should set mission statement as a reference when consider business development strategies, and considering the mission statement impact on the development strategy.

A well-designed mission statement is essential for development, promote and evaluate business strategies. It is the foundation of determine the critical element of operations and improve the strategic plan. Moreover, the role of the mission statement even beyond the scope of strategic management, and involves culture, leadership, and stakeholders.

Obviously, the demands of customers are constantly increasing, so many mission statements are aim to meet the increasing demand of the customers. Johnson and Johnson is a large provider of healthcare products and services. The company's founder wrote a statement of its values called "our Credo" in 1943 and this still dominates the company's culture. Although it does not call it a mission statement, it performs a similar function. Johnson and Johnson’s mission statement is" We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services."(Johnson & Johnson, 2012) From Johnson & Johnson's mission statement, we can interpret that as a company, Johnson & Johnson places the most importance on those people who use its products. The mission of the company could be described as meeting all the possible needs of these consumers at a reasonable price along with a satisfying customer experience. The core of the marketing conception is to set satisfy customers as the center of the commercial activities. Basing on meeting customers’ demand, Johnson & Johnson could achieve reasonable and long-term profits. The demand of the target customers is not only exist in the current industry, but also in the substitute industries. On the other hand, managers must be clear which strategy group they belong to in this industry. It is necessary for an organization, because the organization’s product and service can provide benefits commensurate with its cost or price and satisfy customers’ needs.

Such as the mission statement of the 3M Corporation, "3M is committed to actively contributing to sustainable development through environmental protection, social responsibility and economic progress". (3M, 1998) This mission statement encourages employees invent and create more products fit for the customers. At the same time, it also makes customers know the company is always able to provide more new methods to solve their problems. That is the image which the company wants to show to the public by the mission statement. An organization promotes itself by its mission statement, not only makes internal employees establish unified thinking and behavior guidelines, and also provides an effective way to make people understand the enterprise directly. Especially, statements about enterprise operation strategies and codes of conduct reflect the views and attitudes when the enterprise deals with problems about the relationship between society, various interest groups and individuals. "In recent years there has been a growth in the interest of firms and their customers, employees and partners in Corporate Social Responsibility." (Gillespie, 2007)

"Shareholders and investors want to see that a company has specific goals in mind and is not just following whims and changing its approach at every turn of events. When the head of the company shares the mission statement with shareholders or investors, he should really sell it and convince people that the company will achieve what it has set out to do in the mission statement. People like to know where their money is going and want to be confident that the company has goals that it will be striving toward."(Kristen May, 2012) Like Dow Chemical's (DOW) mission statement, "To passionately innovate what is essential to human progress by providing sustainable solutions to our customers."(Dow, 2012) The Dow Chemical Mission Statement describes the values, services, and the company's Mission for the future. "Typical business objectives focus on profits, growth, market share and cash flow. Increasingly firms are also including objectives that relate to social responsibility focusing on areas such as their contribution to the community, the support given to suppliers and targets to reduce any negative impact on the environment." (Gillespie, 2007)

"Another important consideration is how recently your mission statement was reviewed by board or staff members. If it has been more than five years, now is probably a good time to review and, if necessary, fine-tune or even rewrite the mission statement. All too often an organization’s mission statement, which handed down over the years, loses relevance and ceases to speak to staff, board members or supporters." (Janel M.Radtke, 1998) However, mission statements have a relatively stable property, which transcend product or market life cycles, technological breakthrough and management fashion. It is an indefinite statement. At the same time, its concrete connotation will also change along with the environment and improve. And it is notable that mission statement is more focus on the formation of guiding strategy rather than the implement of control strategy.

The mission statement affects strategic choice and activities. Managers should implement the mission statement to strategic management activities. For an enterprise, the effective mission statement is a huge wealth. It is a cornerstone of the process of strategic management. "Successful organizations take steps to ensure that the values expressed in their mission permeate the everyday behavior of everyone in their organization. They ensure their mission statement is effective." (Marianne Talbot, 2003) Although their business strategies and activities are always changing in order to adapt to the changeful external environment, a successful organization still maintains a stable core purpose and values.

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http://www.dow.com/latinamerica/la/en/about/mission.htm [Accessed 28thOctober, 2012]

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https://www.exxonmobil.com/Corporate/about_who_sbc.aspx [Accessed 31stOctober 2012]

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http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_05.htm [Accessed 30thOctober, 2012]

Linda K. Wallace. (2004). Libraries, Mission, & Marketing: Writing Mission Statement That Work. Chicago: American Library Association.

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Janel M. Radtke. (1998). Excepted from Strategic Communications for Nonprofit Organizations: Seven Steps to Creating a Successful Plan. Los Angeles: John Wiley & Sons, INC.

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http://smallbusiness.chron.com/effect-general-mission-statements-31073.html [Accessed 1st November, 2012 ]

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