Chapter 3 - The Business Mission
3.1 The Concept of Mission
A mission is a reason why an organization exists, dealing with what it does, and why it does. It
talks about the present such as where we are, how we compete, and what makes us different
leading to the future. A mission statement explains why a company exists. It also sets a company
apart from its competitors, proposes future growth opportunities, and gives team members a
common goal to strive for. The mission statement clarifies the scope and objectives of the
business. The statement should deal with four concerns – how to serve customers, how to
manage employees, how to increase shareholders’ return, and how to support the community not
extending the words 250. Generally the mission statement is give adequate answer for what is
our business?
For example:
Company Mission
McDonald’s Be the first employer for our people in each community around the world
and deliver operational excellence to our customers in each of our
restaurants.
Coca Cola To refresh the world in mind, body, and spirit.
To inspire moments of optimism and happiness through our brands and
actions.
To create value and make a difference.
Facebook To give people the power to share and make the world more open and
connected.
Microsoft To enable people and businesses throughout the world to realize their full
potential.
Toyota Toyota will lead the way to the future of mobility, enriching lives around the
world with the safest and most responsible ways of moving people.
3.2 Importance of Mission
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The development of the organization’s mission is one of the most crucial duties of a strategist. It
serves as a foundation for strategic management, which includes strategy formulation,
implementation, and evaluation. The importance of the mission statement is presented below.
Create Synergy: It brings uniformity to the organization. It helps build synergy for goal
achievement.
Base of Resource Allocation: It provides a base for the resource allocation to different
businesses or units of an organization.
Develops Organizational Culture: It inspires all the stakeholders of an organization and helps
develop organizational culture that supports the organizational goal.
Enhances Employee Ownership: It enhances employee ownership in the organization and also
increases their commitment.
Defines the Business: It defines the business mainly in terms of products and customers.
Reflects the Organizational Responsibility: It reflects the responsibility of the organization
towards shareholders, employees, communities and social issues.
Shows the Operating Philosophy: It shows the operating philosophy of an organization in
terms of quality, image, and self-concept.
3.3 The nature of business mission
A declaration of attitude: A mission statement is a declaration of attitude and outlook more
than a statement of specific details. It is usually broad in scope for at least two 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. Second, a
mission statement needs to be broad to effectively reconcile differences among and appeal to an
organization’s diverse stakeholders, the individuals and groups of persons who have a special
stake or claim on the company.
A resolution of divergent views: Considerable disagreement among an organization’s
strategists over basic purpose and mission can cause trouble if not resolved. Too often,
strategists develop a statement of business mission only when their organization is in trouble.
Developing and communicating a clear mission during trouble times may indeed spectacular
results and may even reverse decline.
A customer orientation: 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
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organizations should identify customers’ needs and provide a product or service to fulfill those
needs. Good mission statements identify the utility of a firm’s products to its customers. A major
reason for developing a business mission is to attract customer who give meaning to an
organization.
A declaration of social policy: 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. 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 in to all strategic
management activities, including the development of a mission statement.
3.4 Characteristics of Mission
An organization’s mission is the purpose or the reasons for its existence. The main
characteristics or features of the mission statement are mentioned below:
i. Indicate the Scope of an organization
The mission of an organization determines its scope. It answers, what is our business? In other
words, it clears up the product and market of the business. It also provides a base for the
formulation of goals and strategies.
ii. Precise
A mission statement is always presented in a precise way. Normally, it includes not more than
250 words. As you can see in the above examples no company’s missions are more than 250
words.
iii. Inspiring
It inspires all the stakeholders and encourages them to involve in the organization in a motive
way. A well-written and feasible mission statement encourages people to contribute their effort.
iv. Multi components
It involves many components such as customer, product or services, market, technology,
concern for survival, philosophy, self-concept, concern for public image, and concern for
employees.
v. Distinctive
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A mission statement makes the organization different from others. It helps in image building.
3.5 Components of a Mission Statement
Mission statements can and do vary in length, content, format, and specificity. Most
practitioners and academicians of strategic management feel that an effective statement exhibits
nine characteristics or components. Because a mission statement is often the most visible and
public part of the strategic-management process, it is important that it includes all of these
essential components:
1) Customers —who are the firm’s customers?
2) Products or services—what are the firm’s major products or services?
3) Markets—geographically, where does the firm compete?
4) Technology—is the firm technologically current?
5) Concern for survival, growth, and profitability—is the firm committed to growth and
financial soundness?
6) Philosophy—what are the basic beliefs, values, aspirations, and ethical priorities of the firm?
7) Self-concept—what is the firm’s distinctive competence or major competitive advantage?
8) Concern for public image—is the firm responsive to social, community, and environmental
concerns?
9) Concern for employees—Are employees a valuable asset of the firm?