Characteristics of a Mission Statement

A Declaration of Attitude

A mission statement is more than a statement of specific details; it is a declaration of attitude and outlook. It usually is broad in scope for at least two major reasons. First, a good mission statement allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity. Excess specificity would limit the potential of creative growth for the organization. One the other hand, an overly general statement that does not exclude any strategy alternatives could be dysfunctional. Apple Computer’s mission statement, for example, should not open the possibility for diversification into pesticides or Ford Motor Company’s into food processing.

Second, a mission statement needs to be broad to effectively reconcile differences among, and appeal to, an organization’s diverse stake holders, the individuals and groups of individuals who have a special stake or claim on the company. Stakeholders include employees, manager, stockholders, boards of directors, customers, suppliers, distributors, creditors, governments’ local, state, federal, and foreign, unions, competitors, environmental groups, and the general public. Stakeholders affect and are affected by an organization’s strategies, yet the claims and concerns of diverse constituencies vary and often conflict. For example, the general public is especially interested in social responsibility, whereas stockholders are more interested in profitability. Claims on any business literally many number in the thousands, and they often include clean air, jobs, taxes, investment opportunities, career opportunities, equal employment opportunities, employee benefits, salaries, wages, clean water, and community services. All stakeholders’ claims on an organization cannot ve pursued with equal emphasis. A good mission statement indicated the relative attention that an organization will devote to meeting the claims of various stake holders. Many firms are environmentally proactive in response to the concerns of stakeholders, as indicated in the”Natural Environment Perspective” box.

The fine balance between specificity and generality is difficult to achieve, but it is well worth the effort.
An effective mission statement should not be too lengthy; recommended length is less that 200 words. An effective mission statement also arouses positive feeling and emotions about a organization; it is inspiring in the sense that it motivates readers to action. An effective mission statement generates the impression that a firm is successful, has direction, and is worthy of time, support,, and investment form all socioeconomic groups of people.

It reflects judgments about future growth directions and strategies that are based upon forward looking external and internal analyses. A business mission should provide useful criteria for selecting among alternative strategies. A clear mission statement provides a basis for generating and screening strategic options. The statement of mission should be dynamic in orientation, allowing judgments about the most promising growth directions and those considered less promising.

A Customer Orientation

A good mission statement describes an organization’s purpose, customers, products or services, markets, philosophy, and basic technology. According to Vern McGinnis, a mission statement should (1) define what the organization is and what the organization aspires to (2) be limited enough to exclude some ventures and broad enough to allow for creative growth, (3) distinguish a given organization from all others, (4) serve as a framework for evaluating both current and prospective activates, and (5) be stated in terms sufficiently clear to be widely understood throughout the organization.

A good mission statement reflects the anticipations of customers. Rather than developing a product and then trying to find a market, the operating philosophy of organizations should be to identify customer’s  needs and the provide a product or service to fulfill those needs. Since more and more customers are using the Internet, all firms should post their vision and mission statements ate the company’s home page-as indicated in the “E-Commerce Perspective.

Good mission statement identifies the utility of a firm’s products to its customers. This is why AT&T’s mission statement focuses on communication rather that on telephones’ it is why ExxonMobil’s mission statement focuses on energy rather than on oil and gas; it is why Union Pacific’s mission statement focuses on transpiration rather than on railroads; it is why Universal Studio’s mission statement focuses on entertainment rather that on movies. The following utility statements are relevant in developing a mission statement.

·         Do not offer me things.
·         Do not offer me clothes. Offer me attractive looks.
·         Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking.
·         Don not offers me a house. Offer me security, comfort, and a place that is clean and happy.
·         Do not offer me books. Offer me hours of pleasure and the benefit of knowledge.
·         Do not offer me records. Offer me leisure and the sound of music.
·         Do not offer me tools. Offer me the benefits and the pleasure that come form making beautiful things.
·         Do not offer me furniture. Offer me comfort and the quietness of a cozy place.
·         Do not offer me things. Offer me ideas, emotions, ambience, feelings, and benefits, Please, do not offer me things.

A major reason for developing a business mission statement is to attract customers who give meaning to an organization. Hotel customers today want to use the Internet, so more and more hotels are providing Internet service. A classic description of the purpose of a business reveals the relative importance of customers in a statement of mission.

“It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or service converse economic resources into wealth and things into goods. What a business thinks it produces is not of firs importance, especially not to the future of the business and to its success. What the customer thinks he/she is buying, what he/she considers value, is decisive it determines what a business is, what it produces, and whether it will prosper. And what the customer buys and considers value is never a product. It is always utility, meaning what a product or service does for him or her. The customer is the foundation of a business and keeps it in existence.

A Declaration of Social Policy

The term social policy embraces managerial philosophy and thinking at the highest levels of an organization. For this reason, social policy affects the development of a business mission statement. Social issues mandate that strategists consider not only what the organization owes its various stakeholders but also what responsibilities the firm has to consumers, environmentalists, minorities, communities, and other groups. After decades of debate on the topic of social responsibility, many firms still struggle to determine appropriate social policies.

As indicated in the “Global Perspective” corporate policies related to mandatory retirement are a growing social concern in many countries.The issue of social responsibility arises when a company establishes its business mission. The impact of society on business and vice versa is becoming more pronounced each year. Social policies directly affect a firm’s customers, products and services, markets, technology, profitability, self-concept, and public image. An organization’s social policy should be integrated into all strategic management activates, including the development of a mission statement. Corporate social policy should be designed and articulated during strategy formulation, set and administered during strategy implementation, and reaffirmed or changed during strategy evaluation. The emerging view of social responsibility holds that social issues should be attended to both directly and indirectly in determining strategies. In 2005, the companies for social responsibility were as follows.

·         Fannie Mae
·         Procter & Gamble
·         Intel Corporation
·         St.Paul Companies
·         Green Mountain Coffee Roasters
·         Deere & Company
·         Avon Products, Inc.
·         Hewlett-Packard Company
·         Agilent Technologies Inc.
·         Ecolab Inc.
·         Imation Corporation
·         IBM

Firms should strive to engage in social activates that have economic benefits. For example, Merck & Co. recently developed the drug erecting for treating river blindness, a disease caused by a fly-borne parasitic worm endemic in poor, tropical areas of Africa, the Middle East, and Latin America. In an unprecedented gesture that reflected its corporate commitment to social responsibility, Merck then made erecting available at no cost to medical personnel through out the world. Merck’s action highlights the dilemma of orphan drugs, which offer pharmaceutical companies no economic incentive for development and distribution.
Despite differences in approaches, most U.S. companies try to ensure outsiders that they conduct their businesses in socially responsible ways. The mission statement is an effective instrument for conveying this message.

Some strategists agree with Ralph Nader, who proclaims that organizations have tremendous social obligations. Others agree with Milton Friedman, the economist, who maintains that organizations have no obligation to do any more for society that is legally required. Most strategists agree that the first social responsibility of any business must be to make enough profit to cover the costs of the furred, because if this is not achieved, no other social responsibility can be met. Strategists should examine social problems in terms of potential costs and benefits to the firm, and they should address social issues that could benefit the firm most.