Mission and Vision Statements

Hierarchy of business aims Vision-This is the desired future state of the organization Mission-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 statements Vision 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 statements Mission 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 mission Campbell (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 Statements Communicate the nature of the organization to stakeholders Communicates the desired culture and behaviour Focuses strategy Providing strategic direction to the organization Assisting in the resolution of potential conflict among different stakeholder groups Providing a framework within which managerial decisions can be made Assisting in the presentation of a clear image of the organization Helping to prevent potential misinterpretations of the organization's ‘reason for being’.

Criticisms Generally 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 valueless They may be unrealistic and not reflect reality There may be inconsistency between different elements They may be inconsistent with management action They may lack sufficient external focus

Impact of mission statements on performance Identity of the persons for whom the organisation exists e.g. shareholders, customers, employees The nature of the firm’s business Ways 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 objectives Objectives are set to help the organization control performance Characteristics 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