DEFINING THE ORGANIZATION`S MISSION
An organization`s mission is an overall goal of the organization that provides a sense of direction and a guide to decision making for all levels of management. Without a clear mission, it is virtually impossible for an organization to develop objectives and strategies. Organizational mission should define the organization`s line or lines of business, identify its products and services, and specify the markets it serves at present and within a time frame of three to five years. It provides an overall guide to those in high-level, decision-making positions. It increasingly is concerned with the moral and ethical principles that guide the actions of the firm.
An effective mission should be challenging to the organization, but should be achievable. It should be in writing and should also have a time frame for achievement. Thus, a mission statement does not announce specific operating plans. It does not describe strategies for technological development, market expansion, or product differentiation because these are tasks for operating management.
No widely accepted standard exists for the contents and format of a mission statement. One study suggested that a mission statement should include the following components:
Target customers and markets.
Principal products and services.
Concern for survival, growth, and profitability.
Desired public image.
It is important to note, however, that organizational philosophy, purpose, and mission statements are not always separate and distinct documents. Often these statements are combined into one document, but that one document still embodies the essential features of the philosophy, purpose, and mission statements from the previous paragraphs.
Exhibit 2 presents some examples of mission statements from real enterprises.
EXAMPLES OF MISSION STATEMENTS
We will treat each other with respect and dignity and do the same for all we serve.
We will offer employees of all backgrounds a place to build careers.
We will provide the most convenient access to healthcare services and consumer goods in America.
We will earn the trust of our customers and build shareholder value.
The mission of Trader Joe`s is to give our customers the best food and beverage values that they can find anywhere and to provide them with the information required for informed buying decisions. We provide these with a dedication to the highest quality of customer satisfaction delivered with a sense of warmth, friendliness, fun, individual pride, and company spirit.
"To solve unsolved problems innovatively."
Mary Kay Cosmetics
"To give unlimited opportunity to women."
"To preserve and improve human life."
"To give ordinary folk the chance to buy the same thing as rich people."
"To make people happy."
"To inspire and nurture the human spirit - one person, one cup and one neighborhood at a time."
These are the `one-liners`, but each is supported by a set of values that set the performance standards and direct the implementation of the mission. For example, Merck, a company that produces pharmaceutical products and provides insurance for pharmacy benefits, publicly states the following values.
Corporate social responsibility;
Unequivocal excellence in all aspects of the company;
Honesty & integrity;
Profit, but profit from work that benefits humanity.
And Walt Disney, an entertainment business states their values as follows.
Nurturing and promulgation of "wholesome American values";
Creativity, dreams and imagination;
Fanatical attention to consistency and detail;
Preservation and control of the Disney "magic".
An organization`s mission is not determined by the organization itself but rather by its customers. Customer satisfaction with an organization`s products and services defines its mission. Thus, defining an organization`s mission starts with a clear description of its customers. Questions that need to answered are:
Who is the customer?
Where is the customer located?
How does the customer buy?
How can the customer be reached?
What does the customer buy?
What does the customer consider value? (What does the customer look for when he or she buys the product?)
Since a mission statement is also concerned with an organization`s future business activities, its potential customers must also be described. The following questions need to be answered:
What are the market trends and market potential?
What changes in market structure might occur as a result of economic developments, changes in styles or fashions, or moves by the competition?
What innovations will alter the customer`s buying habits?
What needs does the customer currently have that are not being adequately met by available products and services?
One final question needs to be addressed in determining an organization`s mission: Is the organization in the right business, or should it change its business?
Mission and Management
Mission must be communicated to and internalized by managers and employees. When a mission is recognized and accepted by managers and employees, it becomes a common framework for making decisions and setting priorities. It is something that everyone in the organization is aware of, and employees can relate their activities to other activities through the mission.
Mission provides criteria for strategy selection by the management of the organization. Many potential acquisitions or diversification moves have been ruled out because the new business was not within the framework established by the organization`s mission. Mission defines the boundaries or domain within which the organization will operate. These boundaries may be defined as industries or types of industries. Mission does not prevent change, it simply provides direction for seeking new opportunities. A good mission statement is broad enough to allow exploration of new opportunities but specific enough to prevent the organization from going too far afield.
Mission and Stakeholders
Many individuals and groups outside the organization make decisions crucial to organizational success. The investment community makes judgments concerning the level of financial support it will provide; customers judge whether to support the organization by purchasing goods and services; and potential employees determine whether their individual goals will be furthered by joining the organization. The mission of the organization can affect these decisions. There is little doubt that potentially valuable supporters can be lost if they do not approve the organization mission. It is important, therefore, that the mission be explicitly communicated to avoid misunderstanding of the fundamental purpose of the organization.
Changing the Mission
An organization`s mission must not only be defined at its inception but also must be reexamined regularly. Several factors can signal a need for a reexamination: declining profits and market share, changes in competitive position or top-level management personnel, new technologies, decreased availability or increased cost of resources, and changes in market demographics, government regulations, management in vague or undefined terms (i.e., things simply do not seem to be going right.) Top managers` skill in recognizing the need for change in mission and their ability to clearly delineate the new mission play a significant role in the future success of the organization.
Uniting for a Mission
A company should not have mission soup: Each department has its own values, standards and loyalties that have melted into a chaotic mess. The fix is to become a "regular"-to identify a single corporate mission, and then make sure that all aspects of your organization serve that overarching goal. Below are some possible missions and examples of organizations that operate with them.
Are you customer-focused? Walt-Mart`s mission is simple: "We exist to provide value to our customers: The entire focus of the organization is on doing whatever they can to keep prices low and selection high.
Are you employee focused? Hewlett Packard, on the other hand, focuses on respect and opportunity for HP people, including giving them an opportunity to share in the success of the organization.
Are your products and services the focus of your competitive advantage? Who can forget the classic Ford commercials that proclaimed that quality is job No. I? At a time when the quality of American cars was in decline, Ford`s efforts went a long way to putting quality back into the vocabulary of American car producers.
Do you value taking risks? Sony focuses its efforts on being a pioneer-not just following others, but doing the "impossible." Their support for employee risk-taking has resulted in products that have changed the way we spend our time.
Once each of these companies established a core mission, that mission became the driver of all operations.
Strategic Vision vs. Mission
Very early in the strategy-making process, a company`s senior managers must wrestle with the issue of what directional path the company should take and what changes in the company`s product-market-customer-technology focus would improve its current market position and future prospects. Top management`s views and conclusions about the company`s direction and the product-consumer-market-technology focus constitute a strategic vision. A strategic vision delineates management`s aspirations for the business, providing a panoramic view of "where are we going" and a convincing rationale for why this makes good business sense for the company.
A strategic vision points an organization in a particular direction, charts a strategic path for it to follow in preparing for the future, and molds organizational identity. A clearly articulated strategic vision communicates management`s aspirations to stakeholders and helps steer the energies of company personnel in a common direction. A strategic vision is a roadmap showing the route a company intends to take in developing and strengthening its business. It paints a picture of a company`s destination and provides a rationale for going there.
Well-conceived visions are distinctive and specific to a particular organization; they avoid generic, feel-good statements. For a strategic vision to function as a valuable managerial tool, it must provide understanding of what management wants its business to look like and provide managers with a reference point in making strategic decisions and preparing the company for the future. Having a vision is not a panacea but rather a useful management tool for giving an organization a sense of direction. Like any tool, it can be used properly or improperly, either conveying a company`s strategic course or not.
A strategic vision is different from a mission Statement: Whereas the chief concern of a strategic vision is with "where we are going and why", a company`s mission statement usually deals with a company`s present business scope and purpose -"who we are, what we do, and why we are here." A company`s mission is defined by the buyer needs it seeks to satisfy, the customer groups and market segments it is endeavoring to serve, and the resources and technologies that it is deploying in trying to please its customers. Many companies prefer the term business purpose to mission statement, but the two phrases are essentially conceptually identical and are used interchangeably. Company mission statements almost never say anything about where the company is headed, the anticipated changes in its business, or its aspirations.
The distinction between a strategic vision and a mission statement is fairly clear-cut. A strategic vision portrays a company`s future business scope ("where we are going)" whereas a company`s mission typically describes its present business scope and purpose ("what we do, why we are here, and where we are now").
Occasionally, companies couch their mission in terms of making a profit. The notion that a company`s mission or business purpose is to make a profit is misguided - profit is more correctly an objective and a result of what a company does. If a company`s mission statement is to have any managerial value or reveal anything useful about its business, it must direct attention to the particular market arena in which it operates - the buyer needs it seeks to satisfy, the customer groups and market segments it is endeavoring to serve, and the types of resources and technologies that it is deploying in trying to please customers.
EXAMPLES OF STRATEGIC VISIONS
Black & Decker Corporation
Establish the company as the preeminent global manufacturer and marketer of power tools and accessories, hardware and home improvement products, and technology-based fastening systems.
Provide a global trading platform where practically anyone can trade practically anything.
Red Hat Linux
To extend our position as the most trusted Linux and open source provider to the enterprise. We intend to grow the market for Linux through a complete range of enterprise Red Hat Linux software, a powerful Internet management platform, and associated support and services.
We want to satisfy all of our customers` financial needs, help them succeed financially, be the premier provider of financial services in every one of our markets, and be known as one of America`s great companies.
Hilton Hotels Corporation
Our vision is to be the first choice of the world`s travelers. Hilton intends to build on the rich heritage and strength of our brands by:
Consistently delighting our customers;
Investing in our team members;
Delivering innovative products and services;
Continuously improving performance;
Increasing shareholder value;
Creating a culture of pride;
Strengthening the loyalty of our constituents.
Source: Company documents and Web sites.