Why Vision And Mission Statements Are Important For Commerce Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

All of model organizations realize that communication contributes a great part of success of their businesses. Communication could be seen clearly that is a process transfer information, idea, ect from sender to receiver, for example it connects the employer to the employees, company to their clients, their stakeholders, etc. Otherwise, the organizations have a lot of way to communicate with other such as TV, presentation, advertisement, website, interview, etc. One of the most important of popular communication that is very useful and has been followed by many companies, is the Vision and Mission Statement of organizations. Each company formulates a different and private Vision and Mission Statement depend upon its own plans and conditions. According to Marieke de Mooij (2003), "Vision and Mission should give focus to everyone who involved with the company, be its directly or indirectly", It is a good channel for everyone to know clearly about the strategic planning of business organization.

Therefore, the leader of organizations always concern about the Vision and Mission Statement because if the companies can have a clear Vision and Mission Statement, they will get a satisfaction of people in the first look. Through it, the people can have first estimation about how the companies work, its plans and strategy. After that, they will decide to keep analyzing companies for investing or collaboration.

In keeping with the purpose, the writing is started to explain why many companies formulate a Vision and Mission Statement and demonstrate how they can utilize them effectively. The writing will show the advantages when the companies get a successful Vision and Mission Statement.

II - Vision and Mission Statement: What are they and why they are important for organizations.

II.1 - Vision Statement

Vision and Mission Statement are the inspiring worlds chosen by organization's leaders to clearly and concisely convey the direction of the organizations. With an clear Vision and Mission Statement, the leaders of organizations can powerfully communicate their intentions and motivate their team or their organization to realize an attractive and inspiring common vision in the future. Vision and Mission do two distinctly different duty but they still supplement to each other.

A Vision Statement define the organization's aim, is that clear future state that indentifies the ideals of what the leaders want their organization to become in a long time (normally is 5 years or longer). A Vision Statement shows the purpose and value of the organizations, it describes the future state therefore everyone who involved with the organization will see what ideas was transferred from Vision Statement and they will know how they have to do to get it. For example like employees, its gives direction about how they are expected to behave and inspires them to give their best, it makes all of staff in the organizations have responsibility in work. With clients and customers, it shapes their understanding of why they should work with the organizations. With the stakeholder, it shows the expect of them about the organizations. Therefore, if the organizations have a good vision statement they will have some good conditions such as the employees will hardworking to get the organization's purpose, the customers will feel safely when work with the organizations and the investor will feel happy when they take their money to right place.

However, the Vision Statements need to be written by organization's conditions, business environment, etc. A small company just produces some normal product or service can write a great vision statement such as " We will become a top 1 company in the world" or " We can make everything what you want", etc. The Vision Statements need to be written with the agreement of leaders, employees, customers and stakeholder in organization's permissive condition.

II.2 - Mission Statement

Mission Statements also define organization's purpose and primary objective. It states what the organizations are, who a member of staff is, who they serve, what products and services they provide, and how they make those products and services available to customers. The Mission Statements is not only shows how the organizations reach to the Vision Statement but also show the final purpose and the value that the organizations want to catch. The mission statement ensures some transparency for investors and employees alike so they can have some confidence as to any potential use of their resources are their capital investment or workforce. A mission statement is also created to make sure that all shareholders are clear on the main purpose of the organization so everybody can be focused on the same goals and purposes. When some investors reads a mission statement in a business plan they are looking to get a feel for the range of activities that the company will focus on, in other words its core purpose and what it stands for.

Therefore, the mission statement is very important for organizations. If the companies have a clear mission that meant they have a good trend with a secure future.

Overall, in very simple term, the vision statement is where the companies see themselves, where they want to go and the mission statement is what they want to do to get there.

II.3 - Why the vision and mission statement are important for companies.

With the above explanation, we can see vision and mission contribute a big part in successful business of all companies. The companies that have a good vision and mission statement, will have a clear future for employees, investors and customers. That is a good way to communicate everyone in company, between company with shareholder and customer. The vision will help manager get some profit and motivate employees, not directly contribute but it helps employees know exactly where they serve, who they work for, and what exactly they will be and the employees may see profit as something that they earn from statement and management then use and even give away to shareholders. Although this perception is undesired and disturbing to managements. It clearly shows that both profit and vision are needed to effectively motivate a workforce. When employees and managers together shape or fashion the vision and mission statement for a company, the resultant documents can reflect the personal vision that managers and employers have in their hearts and minds about their own futures. Shared vision creates a commonality of interest that can lift employees out of the monotony of daily work and put them into a new world of opportunity and challenge.

According to some researches, vision and mission statement effect strategic management is well documented in the literature. The firms have a formalized mission statement have twice the average return on shareholders equity than those firm without a formalized mission statement, in another report show that there are 30 percent higher return on certain financial measures between the firms use mission statement than those firm do not have it. Therefore, we can see the necessary of vision and mission statement for a company in model business.

III - How the organizations formulate vision and mission effectively.

The organization knew vision and mission statement can contribute to their successful business. Therefore, if the managers want have a good vision and mission statement for themselves, they will need know how to design a good clear effective vision and mission statement that will support their business plan. And then, the company needs some support equipment that takes the vision and mission statement into the communication of company and their partners. This step is very important for companies, because it is the first step to collect ideas and create core purpose of companies. If the companies create wrong vision and mission statement, they will have a wrong trend in the future. Moreover, if they do not know how to use it effectively, that will be a waste of time and money. This part will describe how to create a good vision and mission statement and how to use it effectively.

III.1 - How to design a Vision and Mission Statement.

III.1.1 - Vision Statement Creation.

When the managers decide to create Vision Statement, they need to know the basic qualities of Vision Statement :

It motivates and inspires

It is stretch and moves toward greatness

It is clear and concise

It is achievable and not a fantasy

It fits with the highest values

It is easy communicate and is clear and simple

And then the managers need to identify their personal and business goals. Goals should be smarter: specific, measureable, attainable, realistic, time bound, enthusiastic and rewarding. They can divide to short-term and long-term goals. They need to answer some question to find out it :

What are personal goals that they want to get ?

What are business goals that they want to catch ?

What final concept that they want their business become ?

After they get their business goals, they need to solve these questions :

What do they stand for?

What does their work mean to them?

How do they want people to see them?

How do they want to be treated and how do they want to treat others?

What are their belief systems?

What characteristics and behaviors do they value?

What is their professional code of ethics?

What are their practice standards?

How do they want the people view their business?

When the managers answer above questions already, they should collect all ideas and write down with the qualities of Vision Statement. However, they should alert with some vision killers:

Tradition / Culture

Fear of ridicule

Stereotypes of people, conditions, roles and governing councils

Complacency of some shareholder

Fatigued leaders

Short-term thinking

III.1.2 - Mission Statement Creation.

The managers need find out answers of these questions : Who they are? What are their purposes, goals, services or products? How do they finish their goals, services or products? And they need write Mission Statement follow theses qualities:

It draws on their belief statements.

It must be future that their company will be.

IT must focus on one common purpose.

It must be specific to the company, not generic.

It must be a short statement, not more than one or tow sentences.

III.2 - How to formulate Vision and Mission Statement effectively?

Organization has Vision and Mission Statement is one thing, how to use it is another thing. We deeply need the experiences and creativity to use Vision and Mission Statement effectively. First, we need to announce our vision and mission statement to public, employees, partners and investors, we can send them by letters, emails or post on company's website. Secondly, we may make the people understand main purpose of Vision and Mission Statement. For employees, we can have a presentation to explain the objective of Vision and Mission and employees can see something such as profit that they can get, the future that they become. From that, we can motivate employees in working. For shareholder, we can send them letter, email or presentation to show how we are going become in the future. We also need run our company follows the mission that we did. It will send to shareholders a good message for the company's secure future and it can attract their capital investment. Moreover, the managers need to work, live, and breath in following the mission statement, it will make all employees see that and do the same thing. Everyone will contribute company together with a same main purpose, it will make really benefit for all of people who involve company such as : manager, employees, shareholders.

For example, we can see the vision and mission statement of Tesco:

Mission: To create value for customers to earn their lifetime loyalty.

Vision: The world's best and biggest multi channel retailer.

With a clear and concise Vision and Mission Statement, Tesco has been making the customers feel safely when buy product in their supermarket, make the shareholder feel this is a good company, make their employees know the aim of company and try to contribute it. In fact, Tesco now is the biggest supermarket in UK with a good service such as home delivery, auto payment systems, high quality foods and products, etc. Until now, Tesco stand at 3rd larges retailer in the world and has 3409 stores in UK and 18 other countries in the world. Tesco became a great brand in UK with high and safe quality products and competitive price. Tesco also attract people by friendly staff, all staff always keep smile in store because they know it not only help their company but also helps their career, their future, it makes profit for both Tesco and employees. We could say that Tesco have a good Vision and Mission Statement and Tesco formulated it effectively.

IV - Recommendation

So does a company need a Vision and Mission Statement to survive? The answer is of course not, a lot of organizations still develop without Vision and Mission Statement is good example to answer above question. However, the company with a good Vision and Mission Statement is the fastest and easy way to communicate to employees, customers and shareholders. Therefore, in my opinion, all organizations need spend time to design their own Vision and Mission Statement. With a good one, they can make more benefit than without it. The manager need to define main purpose, clear future of organization before create Vision and Mission Statement.

Vision and Mission Statement should be created by people who serve in company . Because vision and mission present the objective of organization, manager and employees. If they can write vision and mission by themselves, the reader can get a fully feel about that company.

V - Conclusion

In the model business environment, the communication is a great part of successful plan. Which company communicates to their customers better, they will have better situation in competition environment. That why, almost big company use all skills to communicate to customers, shareholders and Vision and Mission Statement is a good choice. It is absolutely cheap and easy to understand. Therefore, Vision and Mission Statement always is concerned by successful managers

VI - References:

Fred R.David , Strategic Management : Concept and Cases, 2006, pg 56.

Dan Boblinski, How a clear Vision and Mission lead to more profit, 07/2005 http://www.management-issues.com/2006/5/25/opinion/how-a-clear-vision-and-mission-leads-to-more-profits.asp

Tammy Richmond and Dave Powers, Business Fundamentals for the rehabilitation professional, 2004, pg 18-21.

Marieke de Mooji, Golobal Marketing and Advertising, 2010, pg 270.