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Making a strategy is not simple like making a decision to buy a mobile phone instead of a computer. Such an undertaking requires a rigorous planning. In a five years study of high growth companies and their less successful competitors, W.Chan Kim and Renee Mauborne (1998) found that the reason that some companies are able to achieve sustained high growth in both revenues and profits lies in the way each group approached strategy. That is to say, strategies play a vitally important role determining the success of a company. John L Thompson (2001) explains that "strategy, then, are means the ends to a company", it is the result of the strategic management process which including strategic analysis, strategy creation and choice as well as strategy implementation.
John L. Thompson (1995) illustrated that there is no 'one best way' or single technique or model can provide either the right answer concerning what an organisation should do (Strategy in Action). Although different companies may have different strategies, but one thing is certain, 'each company has a direct and broad purpose, which should always be clear, articulated and understood, and which sometimes will summarize in the form of a mission statement' (JohnL Thompson, 2001). Many companies refer mission statement as a road map and "mission statements are widely seen as a key point helping a company to form its identity purpose and direction" (Lance Leuthesser and Chiranjeev Kohil). In writing a mission statement, nevertheless, how many aspects should be emphasized in order to have it made sense? And what is the relationship between mission statement and strategic management process?
This essay is organized into two parts. It initially illustrates three different types of mission via discussing a statement that "in writing mission statements, you are creating a brief description of what you want to focus on and what you want to accomplish". The intention is rather to comment which one is the most effective mission statement but to show that each of the mission statements has share of advantages and disadvantages. Then, it examines the role that mission statements play in the strategic management process. In both parts, relevant examples are provided in order to support the statements.
How to create a sense of mission statement
Mission statement, a management concept, has created both interest and disagreement among researchers, consultants, and practitioners alike (Azaddin Salem Khalifa, 2012). Nearly every company has its mission statement and they can be found in various places, such as advertising posters, annual reports, products covers, and the website of the company. Nevertheless, how to create an effective mission statement?
Brief mission statement
There exists a statement that "writing a mission statement, you are creating a brief description of what you want to focus on and what you want to accomplish". To put it in another way, this view states that mission statement explains the purpose of an organisation in a simple way. This is supported by some researchers. While Gerry Johnson, Kevan Scholes ad Richard Whittington (2002) state that "a mission statement should be a statement of the purpose of an organisation." Â Andrew Campbell and Sally Yeung (1991) state that Peter Drucker (1973) also maintains that mission statement should clear define the purpose of the organization. Besides, many books give mission statement the definition of "aiming to provide stakeholders with overall purpose of an organisation" (Gerry Johnson, Kevan Scholes and Richard Whittington, 2009).
Here are some mission statements of fortune 500 companies:
"To centre on the thing that is always been most important-the online Amazon.com customer'"(Amazon).
"To combine aggressive strategic marketing with quality products and services at competitive prices to provide the best insurance value for consumers" (Aflac).
"Profitable growth through superior customer service, innovation, quality and commitment" (AGCO).
Apparently, these mission statements which are short but conscious articulate the purpose of the organisations. Fred R. David (1987) suggests that mission statement with clear purpose help organizations to distinguish from competitors.
Long words mission statement
However, there is also another kind of mission statement describing the purposes with cumbersome literature. One typical example is the Avon Products, INC. "Be the Global Beauty Leader, We will build a unique portfolio of Beauty and related brands, striving to surpass our competitors in quality, innovation and value, and elevating our image to become the Beauty company most women turn to worldwide â€¦The Most Admired Company We will deliver superior returns to our shareholders by tirelessly pursuing new growth opportunities while continually improving our profitability, a socially responsible, ethical company that is watched and emulated as a model of success" (Avon Products, INC). It almost contains three hundred words. In many ways, it is regarded as an awful mission statement. Some believe t as most people turn against this kind of mission statement and hardly anyone is willing to read it thoroughly. In other words, it is difficult for such kind of mission statement to fulfil its potentials. But Fred R. David argue that David and Cochran (1987) report eight key elements included in mission statements which can be generally concluded as: identify customers, product or service, location, technology, concern for survival, philosophy, self-concept, and public image. It can not be concealed that it is almost impossible to cover these components via a brief description. Thus, mission statements containing long words can describe the purpose of an organisation more specifically which can assist the organisation to build strong core values. Jim Collins and Jerry Porrras (2002) state that the long-term success of an organisation can be attributed to strong core values.
Vagueness mission statement
Apart from this, in examining how mission statements were conveyed, Lance Leuthessser and Chiranjeev Kohi (1989) demonstrated a kind of mission statements which labelled as 'theme' mission statements. Instead of covering the specific focuses, this kind of mission statements seem to be general or even vagueness. For example, the mission statement of City National Corp is 'Attitudes for Success' (City National Corp). He explained that "there is, however, an understandable reason for the lack of detail: It takes a good deal of explaining." It is an effective way to enhance corporate identity. Meanwhile, when discussing the nature of mission statement, Fred R. David also suggested that 'vagueness has its virtues. Specific statements would limit the potential of creative growth for the company.' And However, Davies and Glaister(1997) argue that there is an apparently disadvantage of including specific information in mission statements. That is by publicizing its direction and purpose which includes some strategic long-range plans, such as entering new product markets, a company is more likely to provide competitors with information they can use to their advantage. This may help to understand the mission statement of Starbuck. "Starbucks is to inspire and nurture the human spirit - one person, one cup and one neighbourhood at a time" (Starbucks). But these do not stop Starbucks acting as a multi-national company has a large market share and accepted by millions people worldwide. Its mission statement left an endless space for others to image and creates a kind of atmosphere that offers pride and enthusiasm to stakeholders. That is the point. It differentiates Starbuck from other competitors and even someday, Starbuck becomes a company not just sell coffees but also other kinds of products, this type of mission statement can still work because it represents the unique culture of Starbuck.
The role of mission statement in strategic management process
In facing with new challenges, companies often relay on strategic management process to establish effective strategies that are not only able to conquer these challenges but also to do business more efficiently. Broadly, strategic management process can be divided into three procedures, namely strategic analysis, strategy creation and choice and strategy implementation, all of which can be linked to strategic planning (John LThompson, 2001). Perce and Roth (1988) illustrated that a mission is the "foundation upon which decision makers can build corporate strategic planning process". Besides, Bart and Tabone (2000) and Desmidt and Heene (2007) outline that an effective mission statement is one of the critical strategic tools to success.These, perhaps, help to understand the importance of a meaningful mission statement in strategic management process.
Firstly, a good mission statement is the cornerstone of the strategic management process, which monitors the present situation and provides decision makers with future strategy direction. Pearce (1982) states that it is must for strategic decision makers to determine the basic goals, characteristics and philosophies that will shape the strategic perspective of the firm. Because of this, a mission statement is established. And since mission statement makes clear what the organization will do and what business they are in (Webster, 1992), managers are able to examine whether the daily activities are consistent with targets and whether the company is gradually achieving its purpose and based on which to formulate realistic future strategies. The Apple's mission statement, for example, is to "bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings". Words such as "customers around world, innovative" indicate that managers should check that whether Apple also pay attention to technology and market. In addition, it can be judged that although Apple is a leader company in IT industry, it still needs to persuade technology breakthrough and explore new markets as it wants to be the best in the world and base on which strategies towards future technology innovation and market campaigns will be made.
Besides, in the strategic management process, mission statement is also regarded as a key tool to communicate with stakeholders, so as to inspire organisationals. Gerry Johnson, Kevan Scholes and Richard Whittington (2009) explain that when making a strategy, it is vital for a company to understand "who should the organization primarily serve and how should managers be held responsible for this". One way to communicate the firm's purpose to all stakeholder groups and to guide employees in their contribution towards achieving it is through mission statement (Jonathan Law, john smullen, 2008). For example, the mission statement of Duke Energy Corporation, one of the world's top 500 companies, is that "Our purpose is to create superior value for our customers, employees, communities and investors through the production, conversion, delivery and sale of energy and energy services"( Duke Energy Corporation). The words such as "production, energy" led employees to gain a better understanding of Duke Energy Corporation's focus. Therefore, they are all working with a clear and unified goal. Moreover, such mission statement provides an atmosphere that stakeholders tend to feel respected and careful attended. The sense of mission here acts as cultural control that guides staff to focus efforts on the achievement of strategic goals established on internatlozation and emotional commitment. (Sanchez and Heene, 2004). As a result, mission statement is able to stimulate stakeholders to provide the essential resources a company needed in order to maintain activities (Sanchez and Heene, 2004).
Thirdly, mission statement improves the efficiency of resources distribution. Strategic capacity is the resources and competences an organisation needed in order to survive and prosper (Gerry Johnson, Kevan Scholes and Richard Whittington, 2009). In face with a highly competitive environment, no organisation is able to possess endless resources. Therefore, analysing strategic capacity is the key to strategic management process. Since mission statement provides direction of an organisation, the strategic boundaries established by the mission statement are able to facilitate decision-making process (Sebatian Desmidt, Anita A.Prinzie, 2011). That is to say, a sound mission statement guides the company to allocate the limited resources to the needed place to gain competitive advantages. For example, the mission statement of Dell is "to be the most successful computer company in the world at delivering the bestÂ customer experience in markets we serve"(Dell). According to this mission statement, decision makers will only allocate the resources in the markets it serves. Obviously, this reduces unnecessary extravagant.
As a contrast, mission statement, sometimes, may not be able to help strategic management process if it is not an effective one. One of David's researches (1989) show that some mission statements lead to time-consuming and low efficiency in strategic management process. He explained that sometimes mission statements are overlooked by companies as decision makers spent most time on administrative and tactical concerns. Consequently, mission statements are made in rush without sufficient time to establish targets and implement strategies. This usually happens in small scales companies. It would seem that entrepreneurs starting a small business are generally too preoccupied with the operational aspects of their business to devote adequate time to formulating a meaningful mission statement (Taghi Alavi. Azhdar Karami, 2009). Because of this, these mission statements often unable to articulate or even misrepresent the purpose of the companies which will result in decision makers unable to build suitable strategies and finally be put out of the business.