Mission and Vision Statements

Hierarchy of business aimsVision-This is the desired future state of

the organizationMission-An expression of the overall

purpose and scope of the organization which is in line with the values and expectations of the stakeholders

Goal-A general statement of the aim or purpose in line with the mission

Objective-A more precise statement of the aim in line with the goal. It should ideally be quantified if possible.

Vision statementsVision is orientated towards the

future, to give a sense of direction to the organisation. Vision statements try to answer the question. What is the business for? A vision for the future has three aspects:◦What the business is now◦What the business could be in an

ideal world◦What the ideal world would be like

Mission statementsMission answers the question – what sort

of business are we or do we want to be?Mission statements describe an

organisation’s basic purpose, i.e. what it is trying to accomplish. A mission describes the organization's basic function in society, in terms of the products and services it produces for its customers A mission statement should be brief, flexible and distinctive, and is likely to place an emphasis on serving the customer.

Elements of a corporate missionCampbell (1990) argues that to be effective corporate mission

must contain four elements: Purpose ie what and for whom the company exists for.Why

does the company exist? to create wealth for shareholders?, to satisfy the needs for stakeholders

Strategy; the range of businesses in which the firm seeks to compete and some indication of how it intends to compete. Mission provides the commercial logic for the company, and so defines, nature of business, product/services offered etc

Policies and standards of behaviour; guidelines which help staff decide what to do on a day-to-day basis to carry out the strategy. The mission needs to be converted into everyday performance

Values and culture; beliefs and moral principles which lie behind the firm's culture. Values for the basic unstated, beliefs of the people who work in the organisation

Advantages of mission StatementsCommunicate the nature of the organization to

stakeholdersCommunicates the desired culture and behaviourFocuses strategyProviding strategic direction to the organizationAssisting in the resolution of potential conflict

among different stakeholder groupsProviding a framework within which managerial

decisions can be madeAssisting in the presentation of a clear image of

the organizationHelping to prevent potential misinterpretations of

the organization's ‘reason for being’.

CriticismsGenerally full of meaningless phrases (e.g.

quality, best, etc).May not be a true representation of the culture

or goals of the organization.Useless if it lacks detailed objectives and

programmes for implementation.They may be vague and therefore valuelessThey may be unrealistic and not reflect realityThere may be inconsistency between different

elementsThey may be inconsistent with management

actionThey may lack sufficient external focus

Impact of mission statements on performanceIdentity of the persons for whom the

organisation exists e.g. shareholders, customers, employees

The nature of the firm’s businessWays of competing such as reliance on

quality, innovation, technology and low prices etc

Principles of business e.g. commitment to suppliers and staff, social policy etc

Commitment to customers

Corporate objectivesObjectives are set to help the

organization control performanceCharacteristics of a good objective

◦S – specific◦M – measurable◦A – agreed◦R – realistic◦T – time bound

A goal is by contrast a general intention such as to improve profits