Analyze and discuss the importance of a company’s mission statement.

What is the
main objective: What are the main points to be included?

LECTURER: Dr. Fanos Tekelas

 STUDENT NUMBER: R1901D7310016

A mission statement says what an organization is (Who we are), what is its raison d’etre (Why we
exist) (its reason for being), who its customer base is, what its products and services are
(competitive advantage) (What we value) and its geographic location or region within which it
operates/serves.

A company’s mission statement must, of necessity, be communicated to its employees at it is only

by “living” the mission that company objectives will be achieved. Mission statements are not cast
in stone i.e. they can change based on the current environmental conditions within which a
company operates. It is environmentally sensitive and can influence and shape a company’s
culture.

A mission statement is the building block of a good business strategy and strategy is how we will
achieve its vision. It tells what the future of the company will be. It is essentially a roadmap.
Mission statements keep a company on the road to goal accomplishment. Frances Hesselbein, in
her forward to the book The 5 Most Important Questions You Will Ever Ask About Your
Organization quotes Drucker as saying that “ A Mission Statement is what a company wants to be
remembered as having achieved.” I tend to liken a mission statement to the hand of God in
Michangelo’s painting point the way to go.

When we speak of mission statements, we seldom do so without speaking of a vision statement

and really, a company cannot have a mission statement without having a vision statement.
Whereas, a mission statement is the roadmap, a vision statement tells of the ideal; the end which a
company wants to achieve; a future state. It is an inspiration to an aspiration and must be
communicated to all stakeholders.

A mission statement helps a company gauge its direction relative to what it states and adjustments
can always be made along the way to ensure that the company is on track or on the road to
achieving its objectives. The absence of a mission statement means that a company is doomed to
drift in the “wilderness” of the ever changing business environment and will constantly be reactive
to pressures given that it did not plan for eventualities or was not proactive.

Mission and vision statements offer a broad, overall sense of the road which the company will
travel and in order to reach the end point, (the light at the end of the tunnel), the company must set
goals. While objectives are broad, goals set specific and narrow aims which provide guidelines as
to how, on a daily basis, employees can perform to ensure the achievement of those board
objectives. Goals therefore underpin objectives.
In order for goals to be effective, they must be S(pecific) M(easurable) A(chievable) R(elevant)
T(imebound). Setting SMART goals means that employees are provided with clear and specific
guidelines to enable them to be successful at overall accomplishment of broad objectives. Those
goals must be easily measured (e.g. 10% growth, 5% decrease), to determine whether they are
achievable/achieved. There is an old cliché which says what gets measured gets managed and
what gets managed gets done. A derivative of this cliché is also mentioned by Peter Drucker in his
text The Practice of Management (1954). Therefore, goals must be measured. The measurement
of goals will motivate employees to strive for success through effective strategic planning.

Goals must be realistic. Therefore, a goal of achieving 20% growth in the market (with a product
which is in great demand) within one (1) year may, ceteris paribus, be achievable. However, the
objective of achieving 150% growth in the market within 6 months with a product that is NOT a
winner is not realistic. Therefore, goals must, of necessity, be realistic.

In my previous paragraph, I stated the goals in terms of % (measure) and years (time). It is always
important that goals are set against timelines. Timelines serve as motivators for goal
accomplishment. They drive persons to want to achieve to meet the stated deadlines. A company
may therefore have as its goal achieving a growth rate of 10% in their region within the next 12
months.
REFERENCES

Brannen, Dalton: Make Mission Statements Memorable: Mission Statement as a Management

Tool: Management Today. The Augusta Chronicle, Augusta, GA, April 1999: pp 6.

Cochran, Daniel S.; David, Fred R.; Gibson, C. Kendrick; A Framework for Developing an
Effective Mission Statement, Journal of Business Strategies: Huntsville, Volume 25, Issue 2 (2008,
Fall) pp 27-39

Drucker, Peter F.; Hasselbein, Frances; Snyder Kuhl, Joan (2008). The Five Most Important
Questions You Will Ever Ask About your Organization: Leader to Leader Institute, Jossey-Bass,
Wiley Imprint (2008)

Drucker, Peter F. (1954). The Practice of Management, New York, Harper and Rowe, 1954

Horowitz, Jacques; Ohlsson, Anne-Valirie: A Dream with a Deadline: From Vision to Action.
Perspectives for Managers. Lausanne, Issue 146, May (2007): pp 1-4