Mission and Vision Statements

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Editor: Sonya D. Hill
Date: 2012
Encyclopedia of Management
Publisher: Gale, a Cengage Company
Document Type: Topic overview
Pages: 5
Content Level: (Level 4)

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Mission and Vision Statements

An organizational mission reflects the values and beliefs of top managers in an organization. A mission statement is the broad definition of the organizational mission. It is sometimes referred to as a creed, purpose, or statement of corporate philosophy and values.

A good mission statement inspires employees and provides a focus and direction for setting lower-level objectives. While mission and vision statements can help develop core competency and increase profits, nearly 40 percent of employees do not know or understand their company's mission, which shows the necessity not only of creating the mission statement but also of incorporating it as part of the company culture.

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MISSION VS. VISION STATEMENT

Some companies make no separation between mission and vision statements, while others have a separate statement for each. There is no best way, but some companies find it easier to designate particular business concepts into mission and vision categories.

The mission statement, when separated, deals with the business concept and operation. It describes the business itself, what the business does, and who it does it for. It focuses on the business operation and where employees and consumers figure into the company's plans. It often includes specific goals for products, profits, or reputation.

The vision statement tends to be more abstract. In 2011, Lin Grensing-Pophal described it as “a far-reaching statement that provides an indication of what the company hopes to be or achieve over the long term.” The vision statement is considered the “why” of the mission statement, the expression of the business's ideals and values in general terms. Most businesses design vision statements to last the life of the company, although sometimes new mission statements are developed over time. Vision statements, because of their general nature, are often shorter than mission statements and may be only one phrase.

COMMON ELEMENTS

While mission statements vary from organization to organization and represent the distinctness of each one, they all share similar components. Most statements include descriptions of the organization's target market and geographic domain; its concern for growth and profitability; and its philosophy and desired public image. The following is an example of a mission statement for a family dining restaurant chain:

Our mission is to become the favorite family dining restaurant in every neighborhood in which we operate. This will be accomplished by serving a variety of delicious tasting and generously portioned foods at moderate prices. Our restaurants will be clean, fun, and casual. Our guests will be served by friendly, knowledgeable people who are dedicated to providing excellent customer service.

This mission statement describes the target market and clearly states how the company expects to succeed by offering excellent food and superior customer service.

The mission statement should reflect what is important to the business. If shareholder returns are vital to how the company is run, the statement should mention performance from a shareholder perspective. If production is key, the statement should address, at least in part, resource allocation and operational goals.

The organization also defines what is acceptable behavior through the mission statement. Values and beliefs are the core of a strong mission statement. For example:

Quality and values will secure our success. We will live by our values, have fun, and take pride in what we do. Our values are to maintain a work environment where people enjoy coming to work, to serve our guests and exceed their expectations, and to be profitable and result oriented.

This mission statement does not specify the products or target market. It provides meaning to the organization by stating not only what goals the company wants to achieve but also why it wants to achieve these goals. It will not be effective unless it communicates these core values to all levels of actual business operation.

Many statements refer to the social responsibility of the organization. For example, a company can show its concern for the community, as in the following statement:

To be involved as good corporate citizens wherever we are around the world. We will treat customers and distributors with honesty, courtesy, and respect. We will respect and preserve the environment. Through all of this we will prove to be the worldwide leader in industry trade.

WRITING A MISSION STATEMENT

Whenever possible mission statements should be brief and to the point. Some researchers, such as C. K. Bart, advise that it should be kept to between 30 and 60 words. Some organizations have mission statements that are only one sentence, while others are a paragraph.

At a minimum, each mission statement should answer the following three questions: (1) What are the opportunities or needs the organization addresses? (2) What does the organization do to address those needs? and (3) What principles and values guide the organization? In other words, the statement should define the organization's purpose, business, and values.

Mission statements should also be timeless. Jargon and buzzwords may hold meaning today but may mean nothing to the next generation of employees. Likewise, complex language may look impressive but obscure meaning for the employees who need to understand what is at the core of the business. Being straightforward is key.

There are several software programs designed to help start-up companies create their mission statements and build goals. One such program is Business Plan Pro, although there are many to choose from.

Nonprofit businesses must take special care in composing their mission statements. Peri Pakroo, in Starting and Building a Nonprofit, advises nonprofit organizations to create very well-defined mission statements at the outset so that their activities and programs have clear

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goals. Since nonprofit organizations are usually centered around a clear goal, such as a humanitarian project, it is vital that they have a mission statement that supports their company.

EMPLOYEE INVOLVEMENT

Company-wide input may help when creating a mission statement. This bottom-up approach results in greater commitment to the organization and a better understanding of the organization. Employees from throughout the organization can help identify the core values of the company.

In order to encourage employee participation, many companies have created competitions inviting employees to submit suggestions. Cash prizes are sometimes provided as an incentive for creative and inspirational statements. Some companies find it useful to invite customers to assist in writing a mission statement because they can provide an honest perspective. Mission statements from other companies may also be reviewed to provide ideas.

Creating a mission committee that consists of members of management, frontline employees, and customers is another way to begin writing a mission statement. All areas of the company can contribute to the statement, and employees will be more satisfied knowing that they have helped to create a statement that reflects the company' core business values.

A top-down approach can be effective in smaller organizations or sole proprietorships. There is less time involved in creating a mission statement when it comes from the top. Since frontline employees and lower-level managers may lack the insight necessary to see the big picture, they may not be able to conceptualize the entire organization and therefore miss important aspects of the business. In small businesses that are started by entrepreneurs the mission statement is generally a vision of an individual and therefore may not be negotiable.

SHARING THE MISSION STATEMENT

Once the statement is completed it should be shared with the entire company. The introduction of the mission statement should come directly from top management in order to set the example. Organizations can be creative in making employees aware of the mission statement. Placing it strategically in locations where employees gather will increase awareness, while videos outlining the details of the new mission statement can be spread online. For the mechanics of the statement, various analyses can be used, such as the SWOT analysis, discussed next.

SWOT ANALYSIS

SWOT is an acronym for strengths, weaknesses, opportunities, and threats. SWOT analysis is a strategic planning tool that helps an organization match its internal strengths and weaknesses with external opportunities and threats. Often the best strategies for accomplishing the organization's mission are revealed through the SWOT analysis.

Organizations should first begin by reviewing internal strengths and weaknesses. When analyzing an organization's strengths it is important to identify distinctive competencies or strengths possessed by only a few competing firms. These distinctive competencies often become the competitive advantages that are included in the mission statement. Distinctive competencies can be found in financial resources, quality products and services, proprietary technology, or cost advantages. Organizational weaknesses are skills and capabilities that prevent an organization from implementing strategies that achieve its mission. They can be problems with facilities, lack of a clear strategic direction, internal operating problems, too narrow a product line, weak market image, or the inability to finance changes.

The next step is to identify external opportunities and threats. Organizational opportunities are circumstances in an organization's environment that if capitalized on will result in above normal increases in economic performance. Examples of opportunities are related to the possibility of adding a new product line, increasing market growth, or diversifying into related products. Threats are viewed as circumstances that give rise to normal or below normal economic performance. They can be found in the ease of entry of competitors, increased sales of substituted products, demographic changes, slowed market growth, or increased competition.

SEPARATE MISSION STATEMENTS

For some corporations, one mission statement may not be enough. This occurs when the corporation uses the mission statement as part of its marketing strategy. As consumer interests and markets change, the organization may find that customers are interested in a particular area that the mission statement does not address. The organization prefers to keep the original mission statement, which states company values in long-lasting terms, but also wants to include company views on these other subjects.

The solution is to create additional mission statements with focused information about the company's stance. There are several of these addendums that are popular among corporations, such as diversity mission statements. Companies who want to assure customers and employees of their encouragement of diversity may

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Figure 1

Figure 1

issue the topic its own mission statement. Nordstrom's diversity mission statement, for instance, says, “To maintain a workforce that represents many backgrounds, while remaining deeply committed to cultivating an environment where the contributions of every employee, customer and vendor are valued and respected.”

Environmental mission statements are also common, especially among corporations that want to appeal to consumers interested in sustainability, recycling, and similar topics. These statements may emphasize a company's goals to lower its carbon emission or to promote local produce and business. They may declare an intent to improve the environment through using organic products or give a general vision of sustainability in all company practices.

VALUE STATEMENTS

Value statements are specific statements that often help elaborate the mission statement and what specific company departments stand for. Companies can use them to add detail to general visions or to give a particular team or division its mantra. Sometimes the mission statement of a company is itself a collection of value statements taken as a whole. Whole Foods, for instance, has value statements like “Promoting the health of our stakeholders through healthy eating education,” and “Selling the highest quality natural and organic products available.”

EVALUATION

Evaluation of the mission statement is necessary to ensure the organization is meeting its goals. If needed, new goals may have to be created in order to accommodate changes in the organization. This is a good time to think about rewriting part or all of the mission and vision statements.

It should be noted, however, that the stronger a mission statement is, the less it will need to be changed as the company progresses with time and technology. In a 2008 article, Inc. contributor Jay Ebben suggested that one of the questions mission statement creators should ask is, “What do we do?” This question, according to Ebben, should be answered in a psychological way in terms of meeting intrinsic customer needs so that the company and its products or services can evolve with time.

Mission statements are often difficult to evaluate because of their abstract form. Poor mission statements are not directly measurable and are vaguely worded. Figure 1 presents an example of how mission statements can be measured from the top of the organization to the bottom. Strategic goals are directly tied to the organization's mission statement and apply to the organization as a whole. Tactical goals are departmental goals that support the strategic goals. Finally, operational goals are written at the individual level. Each one of these makes it possible to measure the organization's mission statements. An organization's likelihood of accomplishing its mission is increased as it creates strong and measurable goals at each level.

It is not necessary that the mission statement be measured in quantifiable terms. It may also be measured qualitatively. For example, “We will answer all of our customers' questions and if we do not know the answer, we will find out.” While this is not a quantitative statement it can be measured by monitoring customer service calls and setting operational goals for employees that revolve around follow-up and thoroughness.

Mission statements provide a sense of direction and purpose. In times of change and growth they can be an anchor and a guide in decision making. The benefits far

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outweigh the disadvantages and challenges when looking at the potential for increases in profitability and returns. Defining an organization by what it produces and who it satisfies are major steps toward creating a sound and stable mission statement. Setting a company apart from the competition is probably one of the biggest advantages.

BIBLIOGRAPHY

Abrahams, Jeffrey. 101 Mission Statements from Top Companies: Plus Guidelines for Writing. Berkeley, CA: Ten Speed Press, 2007.

Bart, C. K., and J. C. Tabone. “Mission Statement Rationales and Organizational Alignment in the Not-For-Profit Health Care Sector.” Health Care Management Review, Fall 1998, 54–69.

Collins, Jim. Good to Great. New York: Harpercollins Publishers, 2001.

David, Forest R., and Fred B. David. “It's Time to Redraft Your Mission Statement.” Journal of Business Strategy, January/February 2003, 11–14.

“Does Your Mission Statement Generate Results or Laughs?” Pay for Performance Report, October 2002, 6.

The Drucker Foundation Self-Assessment Tool: Process Guide. San Francisco: Jossey-Bass, 1999.

Ebben, Jay. “Developing Effective Mission and Vision Statements.” Inc., 1 February 2005. Available from http://www.inc.com/resources/startup/articles/20050201/missionstatement.html

Grensing-Pophal, Lin. The Complete Idiot's Guide to Strategic Planning. Indianapolis, IN: Alpha Books, 2011.

Grunig, Rudolf. Process-based Strategic Planning. New York: Springer, 2010.

Karcher, J. N., et al. “The Bottom-Up Mission Statement: A Competitive Strategy for Midsized Accounting Firms.” CPA Journal, June 1997, 36–40.

Miller, P. F., Jr. “Needed: A Mission Statement for Directors.” Directors & Boards, Summer 1997, 27–30.

“Mission Statement Myopia.” Training, December 2004, 16.

Nordstrom, Inc. “Diversity Mission Statement.” Seattle, WA: Nordstrom Inc., 2011. Available from http://shop.nordstrom.com/c/diversity-mission-statement .

Pakroo, Peri. Starting and Building a Nonprofit: A Practical Guide. Berkeley, CA: Nolo, 2007.

Radtke, Janel M. Strategic Communications for Nonprofit Organizations: Seven Steps to Creating a Succesful Plan. Indianapolis, IN: John Wiley & Sons, Inc., 1998.

Robbins, S. P. Essentials of Organizational Behavior. Upper Saddle River, NJ: Prentice Hall, 1997.

State of Michigan. Department of Environmental Quality. “Sample Environmental Mission Statements.” Lansing, MI: Michigan Department of Environmental Quality. Available from http://www.michigan.gov/deq/0,1607,7-135-3585_57765_57804-95945–,00.html.

Wickman, P. A. “Developing a Mission for an Entrepreneurial Venture.” Management Decision, May-June 1997, 373–-81.

Yeargin, B. “Creating the Mission Statement.” Boating Industry, May 1996, 47.

Source Citation

Source Citation   (MLA 8th Edition)
"Mission and Vision Statements." Encyclopedia of Management, edited by Sonya D. Hill, 7th ed., Gale, 2012, pp. 678-682. Gale Ebooks, https%3A%2F%2Flink.gale.com%2Fapps%2Fdoc%2FCX4016600203%2FGVRL%3Fu%3Dmnarasmuss%26sid%3DGVRL%26xid%3D6c8ed77a. Accessed 23 Sept. 2019.

Gale Document Number: GALE|CX4016600203

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  • Bart, C. K.
    • 1: 679
  • Boppel, Michael
    • 1: 680
  • Business plans
    • mission statements
      • 1: 679
  • Ebben, Jay
    • 1: 681
  • From Grey to Silver (Boppel)
    • 1: 680
  • Goals and goal setting
  • Grensing-Pophal, Lin
    • 1: 679
  • Mission and vision statements
    • 1: 678-682
    • common elements
      • 1: 679
    • employee involvement
      • 1: 680
    • evaluation of
      • 1: 681-682
    • separate mission statements
      • 1: 680-681
    • sharing statements
      • 1: 680
    • SWOT analysis and
      • 1: 680
    • value statements component
      • 1: 681
    • writing essentials
      • 1: 679-680
  • Nordstrom, Inc.
  • Operational goals
  • Pakroo, Peri
    • 1: 679-680
  • Social responsibility and corporate citizenship
    • mission and vision statements
      • 1: 679
  • Stakeholders
    • mission and vision statements
      • 1: 681
  • Starting and Building a Nonprofit (Pakroo)
    • 1: 679-680
  • Strategic goals
  • SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis
  • Tactical goals
  • Value statements
    • 1: 681
  • Whole Foods