Academic journal article Academy of Strategic Management Journal

A Mission Statement Analysis Comparing the United States and Three Other English Speaking Countries

Academic journal article Academy of Strategic Management Journal

A Mission Statement Analysis Comparing the United States and Three Other English Speaking Countries

Article excerpt

INTRODUCTION

Now, more than ever, 21st century business enterprises realize the importance of a clear, succinct mission statement to support successful operations. Mission statements serve to communicate vital information to all stakeholders interested in a business organization. Mission statements are normally fairly short with very few that exceed one or two paragraphs. These vital business communication tools must accomplish a number of goals including stating the firm's purpose, unique qualities, values, and basic goals/objectives.

Peter Drucker stated that firms need to develop a mission statement that answers the questions "What is our business?" and "What do we want to become?" in order to effectively manage current and future operations (Drucker, 1974). Effective long range strategic planning requires an accurate answer to these questions by the firms' management. Unless the basic concepts upon which a business has been built are visible, clearly understood, and explicitly expressed, the business enterprise is at the mercy of events (Drucker, 1974).

Thus, the mission statement acts as a guide; top managers must think through and articulate the nature of the business so that employees throughout the organization, and in conjunction with the organization's other stakeholders, act with direction and unison in pursuing decisions that provide direction toward compatible goals. The largest business organizations must be especially dedicated to publishing accurate mission and vision statements because they will be analyzed by millions of various stakeholders.

Drucker points out that the firm's business purpose and business mission are rarely given adequate thought and consideration. He feels that this omission is perhaps the most important single cause of business frustration and business failure (Drucker, 1974). The rush to splice words together to arrive at a "so-called" mission statement may be problematic for some firms but this may indeed be changing. Today, many American businesses have reached the point where mission statements no longer stand as hollow, decorative statements of purpose.

Fred David argues that a mission statement is a declaration of an organization's "reason for being" (David, 2009). David also argues that a complete mission statement must provide a wealth of information for the wide variety of stakeholders. He feels that an effective and efficient mission statement must define an organization's target market customer group(s), its products or services produced, the markets served, technology employed, and the firm's concern for survival, growth, employees, profitability, and the environment (David, 2009).

David believes that these factors should be utilized to create and evaluate mission statements. Using this process, he feels that the firm will be proactive in the creation of an effective mission statement. A number of authors, including David, believe that many organizations use a reactive (rather than proactive) approach in the development of a mission statement. The reactive method describes firms that create mission and vision statements only after the firms have experienced financial difficulties (David, 2009). He feels that the development of mission and vision statements in time of crisis is representative of irresponsible management behavior. David also states that any organization that fails to develop a comprehensive and inspiring mission statement loses the opportunity to present itself favorably to existing and potential stakeholders including shareholders, creditors, vendors, and employees (David, 2009).

Research conducted by Verma found that significant numbers of stakeholders are now aware of and understand their mission statement. (Verma, 2010). To truly approach the importance of the final product (mission statement), top management must use judgment and serious reflection in creating a statement that appropriately identifies critical stakeholders, goals, and objectives. …

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