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What is Mission in business and characteristics of Mission

Updated on August 29, 2016

One of the roles of a mission statement is to give the organization its own special identity. i.e. Business emphasis and path for development - one that typically sets it apart from other similarly situated companies.

Definitions

1) Reason for existence

2) Describes the organization’s basic function in society in terms of the products and services it produces for its clients

3) A company’s mission statement is typically focused on its present business scope “Who we are and what we do”. Mission statements broadly describe an organization’s present capabilities, customer focus, activities, and business make up.

Coming up with a mission is not as simple as it might seem. Is Coca-cola in the soft-drinks business (in which case management’s strategic attention can be concentrated on outselling and outcompeting Pepsi, 7-Up) or is it in the beverage business (In which case, management also needs to think strategically about positioning Coca-Cola products to compete against fruit juices, ready to drink teas, bottled water, sports drink, milk and coffee).

Sometimes companies express their business mission in terms of making a profit. This is misguided. Profit is more correctly an objective and result of what the company does. The desire to make a profit says nothing about the business arena in which profits are to be sought. Missions based on making a profit do not allow us to distinguish one type of profit-seeking enterprise from another. The business of amazon.com is plainly different from the business of Toyota, even though both endeavor to earn a profit. A company that says its mission is to make a profit begs the question “what will we do to make a profit?” To understand a company’s business purpose, we must know management’s real answer to that question.

Characteristics of a mission statement

  • Defines current business activities
  • Highlights boundaries of current business
  • Conveys

Who we are

What we do

Where we are now

Company specific, not generic - so as to give a company its own identity

  • Values and culture

Boundaries may be set in terms of geography, market, business method, product or any other parameter that defines the nature of the organization. Values are the basic, perhaps unstated beliefs of the people who work in the organization. The values of the business as a collective entity are in tune with the personal values of the individuals working for it. In conflicts of ethics, clashes between organizational and personal values are hard to resolve if someone’s principles disagree with what the organization wants.

The importance of mission

a) Values and feelings are integral elements of consumer’s buying decisions, as evidenced by advertising, branding and market research. Customers not only ask “what do you sell”? But they ask “what do you stand for?”

b) A respect for quantifiable information is part of the professional culture and training of the accountant. Other people have different values and priorities.

c) Studies in to organizational behavior suggest that employees are motivated by factors more than money. A sense of mission and values can help to motivate employees.

d) Many firms take mission seriously in strategic management.

Mission Statement

Mission Statements are formal statements of an organization’s mission. They might be reproduced in a number of places (e.g. at the front of an organization’s annual report, on publicity materials, in the chairman’s office). There is no standard format for the mission statement, but they should possess certain characteristics.

  • Brevity - easy to understand and remember
  • Flexibility - to accommodate change
  • Distinctiveness - to make the firm stand out

A broad or narrow mission statement

Good mission statements are highly personalized and unique to the organization for which they are developed. A mission statement can be defined in narrative form or broad form.

Broad definition
Narrow definition
Entertainment of Customers
Show a film
Furniture business
Brought-Iron lawn furniture business
Telecommunication business
Long-distance telephone service business
Global mail delivery business
Overnight package delivery business

The risks of making an overly broad mission statement are lack of business focus and dilution of effort. Few businesses fail because they are focused on sharply targeted market opportunities but many fail or do badly because management’s attention is divided and resources are scattered across too many areas.

Mission statements for functional departments

There is also a place for mission statements for key functions and departments within a business - R & D, marketing, finance, human resources, customer service, and information systems. Every department can help focus the efforts of its personnel by developing a mission statement that sets forth its principal role and activities, the direction it is headed and its contribution to the overall company mission.

Examples:

The mission of the human resources department is to contribute to organizational success by developing effective leaders, creating high-performance teams and maximizing the potential of individuals.

Problems with mission

  • Ignored in practice

The inherent danger of mission is that it will not be implemented. Their official goals often do not correspond with the end they actually seem to pursue.

  • Public relations

Sometimes, of course, mission is merely for public consumption, not for internal decision making.

  • “post hoc”

Missions are sometime produced to rationalize its existence to particular audiences. In other words, mission does not drive the organization, but what the organization actually does is assumed to be a mission.

  • Full of generalizations

"Best", “Quality”, “major” is just a wish list.

© 2015 Lasantha Wijesekera

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