Definition and Explanation
“Mission statement can be define as “what a company actually does”? What is the business? And why a company does it?” It defines an organization core purpose or reason for being, this often called the “credo”, “philosophy”, “core values” or “organizational aspirations”. The basic purpose or objective of mission is to distinguish one organization from other similar organizations.
According to P. Drucker, who is called the father of modern management, it is the primary guidance in creating plans, strategies, and making daily decisions. Mission is also an important communication tool that conveys information about organization’s products and services, targeted customers (whom it wants to serves), geographic markets where it will operate, what about its philosophies, values and plans for future growth to all of organization stakeholders. Every major reason of existence should be reflected in its mission, so any customer, employee, supplier, or community can easily understand the driving force behind organization’s operations.
Its Silent features are
- Statement of the purpose
- Distinguish an organization from rest of similar organization
- It tell what an organization wants to be (purpose)
- To whom organization wants to serve
- Starting point for designing of managerial job & functions
- Foundation for priorities, strategies & plans
There are Two Main Types of Mission Statements
Customer-oriented means an organization’s purpose in terms of meeting customer needs (demand) or providing solutions for customer problems in the form of products. it provide more flexibility as compared to product-oriented and can be easily adapted to dynamic environment.
The best example of customer-oriented is Nokia’s statement “connecting people”. It does not focus on Smartphone or mobile phones only. As it provides solution to customer needs so it will be working even 50 years later. Such statements also give more strategic flexibility for the organization. In Nokia’s case, it may start providing VoIP software for its customers and to allow calls to be made over the internet and its mission would still be valid.
Product-oriented means focus on products and services. It define products or services to serve rather than what solutions to provide for customers. Product-oriented statement provide less flexibility for the company because many products have short life cycle as well as offer limited market expansion.
Effective Mission Statement must Include the Following 9 Components
- Customers: Who are the company customers and how it benefit (serve) them?
- Products or services: What are the main products or services of the company? What are the uniqueness of products and services (attributes & features)?
- Markets: In which geographical markets business will operate?
- Technology: What is the firm’s basic technology and how firm will respond with advance and new technologies?
- Self-concept: What are the strengths, competencies or competitive advantages?
- Concern for survival: Is the firm committed to financial soundness and growth?
- Public image: Is the particular bsuiness socially environmentally friendly and responsible?
- Employees Concern: How does a company treat its employees?
- Philosophy: What are the basic philosophies (beliefs & values) that guide an organization?
How To Write A Mission Statement?
Writing a mission statement is a very important and vital first step in clearly identifying a company “reason for being or the purpose of a company”. It’s not easy to do it right therefore, companies follow some steps and guidelines which lead them to success. These steps are as below:
Step 1. Gather a team of departmental managers, key employees and shareholders
Due to its unmost importance for organizations, it must be understood by employees of all levels. When a company will involve more people (mangers & employee) in its creation, it will come to know that how different levels employee and mangers sees organization and its core purpose. A basic advantage of employee and mangers involvement is that employees and managers will support organization’s mission more if they will be involved in the process of developing it.
Step 2. Select articles / samples & distribute
In this step companies selects article or samples and then distributes among selected mangers and employee. Companies ask them to read these samples as background information.
Step 3. Ask mangers & employees to propose one
In third step companies ask selected managers and employees to purpose their own for the company. At this stage companies ask selected managers and employees to answer all 9 components which I discussed above. Managers and employees are required to honestly answer all the questions and identify it customers, markets, values etc. It is created by answer in 9 components will be highly beneficial for the company.
Step 4. Find the best combination and make the final version
At this final stage a facilitator or a committee of top level management should then merged all submitted statements into a single and final statement. During this step, companies must make sure that final version should reflect the “company’s reason for being”.
Importance of Mission Statement
Many studies and researches have been conducted to find either communicating it helps an organization to achieve higher performance or not. There were mixed results, some studies shows positive relationship between well written and higher organizational performance, while other shows none or even negative relationship. One basic reason may be that most of the organizations create it only because it’s fashionable to do so. After designing, organizations made a little effort to actually communicate it to its stakeholders. Many experts of business and marketing says that if an organization constantly revises its statement and consider it as a living document, that company can achieves higher performance than its competitors.
All the famous business and marketing authors agree that following are importance and benefits
- Mission ensure agreed purpose with organization
- It provide a basis or standard for allocation of organizational resources
- It facilitate translation of objectives into practical work
- Due to it cost, time and performance can be assessed (measured) and controlled
- Mission informs organization’s stakeholders about its organization plans and goals
- It directs and unifies company’s employee efforts in towards its goals
- Mission serves as an effective public relations tool of the company
- It provides guidelines for strategic planning or daily decision making
- Mission shows that a company is proactive
Summing up all above, it is very important tools of an organization and its play a vital role in all business planning and day to day decisions. Successful companies need to make it customer-oriented as well as be inspiring and enduring. It should also be comprehensive and should not exceed more than 250 words. Organization should also communicate its mission statements to its all employees and stakeholders to have positive impact.