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Vision Statements and Mission Statements are the inspiring words chosen by successful leaders to clearly and concisely convey the direction of the organization. By crafting a clear mission statement and vision statement, you can powerfully communicate your intentions and motivate your team or organization to realize an attractive and inspiring common vision of the future.
A Mission Statement defines the organization’s purpose and primary objectives. Its prime function is internal – to define the key measure or measures of the organization’s success – and its prime audience is the leadership team and stockholders.
Vision Statements also define the organizations purpose, but this time they do so in terms of the organization’s values rather than bottom line measures (values are guiding beliefs about how things should be done.) The vision statement communicates both the purpose and values of the organization. For employees, it gives direction about how they are expected to behave and inspires them to give their best. Shared with customers, it shapes customers’ understanding of why they should work with the organization
Vision Statements are difficult to write – they should short, clear, vivid, inspiring and concise without using jargon, complicated words or concepts. Successful Statements are memorable and engaging. A combination of both a company’s mission and a company’s vision of the future may be included in a Mission Statement. No wonder there is so much confusion between Vision Statements and Mission Statements!
A Vision is defined as ‘An Image of the future we seek to create’.
A Mission is defined as ‘Purpose, reason for being’. Defined simply “Who we are and what we do”.
A good definition for a Mission Statement is a sentence or short paragraph which is written by a company or business which reflects its core purpose, identity, values and principle business aims. The definition for Vision Statements is a sentence or short paragraph providing a broad, aspirational image of the future.
An organizational mission is an organization’s reason for existence. It often reflects the values and beliefs of top managers in an organization. A mission statement is the broad definition of the organizational mission. It is sometimes referred to as a creed, purpose, or statement of corporate philosophy and values. A good mission statement inspires employees and provides a focus and direction for setting lower level objectives. It should guide employees in making decisions and establish what the organization does. Mission statements are crucial for organizations to prosper and grow. While studies suggest that they have a positive impact on profitability and can increase shareholder equity, they also support that almost 40 percent of employees do not know or understand their company’s mission.
Not only large corporations benefit from creating mission statements but small businesses as well. Entrepreneurial businesses are driven by vision and high aspirations. Developing a mission statement will help the small business realize their vision. Its primary purpose is to guide the entrepreneur and assist in refining the planning process. By developing a strategic plan that incorporates the mission statement, entrepreneurs are more likely to be successful and stay focused on what is important. The mission statement encourages managers and small business owners alike to consider the nature and scope of the business. Business Week attributes 30 percent higher return on several key financial measure for companies with well-crafted mission statements.
While mission statements vary from organization to organization and represent the distinctness of each one, they all share similar components. Most statements include descriptions of the organization’s target market, the geographic domain, their concern for survival, growth and profitability, the company philosophy, and the organization’s desired public image. For example:
Our mission is to become the favorite family dining restaurant in every neighborhood in which we operate. This will be accomplished by serving a variety of delicious tasting and generously portioned foods at moderate prices. Our restaurants will be clean, fun, and casual. Our guests will be served by friendly, knowledgeable people that are dedicated to providing excellent customer service.
This mission statement describes the target market, which are families and the geographic domain of neighborhoods. It clearly states how it expects to be profitable by offering excellent customer service by friendly, knowledgeable people. When defining the mission statement it is important to take into account external influences such as the competition, labor conditions, economic conditions, and possible government regulation. It is important to remember however, that mission statements that try to be everything to everybody end up being nothing to anybody.
Companies should have mission statements that clearly define expected shareholder returns and they should regularly measure performance in terms of those expected returns. If the major reason for a business’s existence is to make a profit then it stands to reason that expectations of profit should be included in the organization’s mission. This means that management should reach a consensus about which aspects of the company’s profit performance should be measured. These might include margin growth, product quality, market share changes, competitive cost position, and capital structure efficiency.
A mission statement sets the boundaries for how resources should be allocated and what strategic and operational goals should be set. The mission statement should acknowledge the company’s strengths and then inform employees where to direct their efforts in order to take advantage of those strengths. Before writing a mission statement organizations should take a look at how they are different from the competition, whether it is in technology, image and name brand, or employees. It can often be thought of as a recipe for success because it not only defines the organization’s accomplishments but it also provides employees with directions to help them develop plans and look for opportunities for improvement.
The organization defines what is acceptable behavior through the mission statement. Values and beliefs are the core of a strong mission statement. For example:
Quality and values will secure our success. We will live by our values, have fun, and take pride in what we do. Our values are to maintain a work environment where people enjoy coming to work, to serve our guests and exceed their expectations, and to be profitable and result oriented.
This mission statement is simple and straightforward. It does not, however, specify the products or target market. The mission statement also provides meaning to the organization by stating not only what goals the company wants to achieve but also why it wants to achieve these goals. It is not effective unless it is challenging and forces workers to establish goals and means to measure the achievement of those goals. A mission statement should inspire employees and get them involved in the organization. It has been called the glue that holds the organization together through shared values and standards of behavior. A mission statement should be relevant to the history, culture, and values of the company.
Many statements refer to the social responsibility of the organization. For example, a company can show their concern for the community in the following:
To be involved as good corporate citizens wherever we are around the world. We will treat customers and distributors with honesty, courtesy, and respect. We will respect and preserve the environment. Through all of this we will prove to be the worldwide leader in industry trade.
One important issue in organizations today is the concern with diversity. While it is not a traditional point included in mission statements, more and more companies are including it because of the globalization of the economy and the increased diversity of the workforce.
Before writing a mission statement, leaders in the organization must have an idea of what is in store for the future. This vision is the foundation for the mission statement. The vision provides a strategic direction, which is the springboard for the mission and its related goals. A vision statement differs from a mission statement. Vision statements are a view of what an organization is striving to become. For example:
To bring back to neighborhoods all over America the importance of family unity. We will view ourselves as a family so these attributes will be carried over into our service.
They guide an organization into the future while mission statements are a reflection of the present. Because vision statements are a glimpse into the future, they are often not realized for several years. Organizations go through many changes and can face times of confusion and uncertainty. Changes are not always expected or easy, so a well thought out vision statement will help everyone stay focused and meet the organization’s goals.
Some examples of well-known companies’ mission statements:
Historically, these may have seemed arrogant. But consider the outcome of the following mission statements from each company’s early days:
When creating a mission statement there are a few simple guidelines that can be followed. It is important to remember the basics so the mission statement stays simple and straight to the point. Some researchers agree that it should be kept to between 30 and 60 words, while others believe it does not necessarily have to be that brief. Some organizations have mission statements that are only one sentence, while others are a paragraph. An example of a mission statement that is limited to one sentence is “Our business is selling houses and our mission is total customer satisfaction.” At a minimum, each mission statement should answer the following three questions: (1) What are the opportunities or needs the organization addresses? (2) What does the organization do to address those needs? and (3) What principles and values guide the organization? In other words, defining the organization’s purpose, business and values.
Avoiding jargon and buzzwords will keep the mission statement clear and easy to understand. It should be universal and simple to comprehend for all employees in the organization. It should be unique and identify the organization. A mission statement is often what sets one company apart from the competition. It should outline the organization’s competitive advantages and differentiate it from everyone else. Specific products/services offered as well as markets or customers should be included. Also a general business definition, behavioral standards, and desired competitive position can be added to a strong mission statement.
It is often helpful to allow company-wide input when creating a mission statement. This “bottom up” approach results in greater commitment to the organization and a better understanding of the organization. Employees from throughout the organization can help identify the core values of the company. In order to encourage employee participation, many companies have created competitions inviting employees to submit suggestions. Cash prizes are sometimes provided as an incentive for creative and inspirational statements. Some companies find it useful to invite customers to assist in writing a mission statement because they can provide an honest perspective. Another option is to review mission statements from other companies. This can help provide ideas as the writing process begins.
It is important to keep in mind that there will be a draft process involved in creating the mission statement. Employees can often provide invaluable insight on how to improve on each draft. In the end, the mission statement should reflect the personality of the organization. Thus, each company should be creative and unique in developing its own statement. Creating a mission committee that consists of members of management, frontline employees, and customers is another way to begin writing a mission statement. The major benefit of this strategy is the inclusion of all areas of the organization to ensure that everyone is represented. Another benefit is that employees will be more willing to work toward accomplishing the mission if they know they had a voice in its creation.
A “top down” approach can be effective in smaller organizations or even sole proprietorships. There is less time involved in creating a mission statement when it comes from the top. Also, many times frontline employees and lower level managers lack the insight necessary to see the big picture. They may not be able to conceptualize the entire organization and therefore miss important aspects of the business. Participation may not always be a good option for small businesses. In small businesses that are started by entrepreneurs the mission statement is generally a vision of an individual and therefore may not be negotiable. When the mission statement comes from upper management, employees are more assured of the organization’s commitment to the statement.
A word of caution should be noted when deciding whether to adopt a “top down” approach or a “bottom up” approach. If the mission statement is to be created with a wide variety of input from both employees and customers then it will take longer than a “top down” approach. There must be a sharing of views and ideas with compromises made. A consensus should be developed without the problems associated with groupthink. There is always the possibility that too much compromise will distort the mission statement and the end result is something different from the original intent. The “top down” approach is not always effective because it rarely consults employees when making important decisions. Therefore, although it is the fastest route to take it isn’t always the most effective. While the mission statement should be able to change with the times it is also understood to have a certain degree of permanence. As new businesses begin to grow and hire more employees the mission statement should provide a strong sense of stability and a clear definition of the culture.
A mission statement is worthless unless it has the support of the employees in the organization. It will only be successful if each employee commits to its success and internalizes it. Once the statement is completed it is extremely important that the organization not put it on the shelf to collect dust. It should be shared with the entire company. The introduction of the mission statement should come directly from top management in order to set the example. Organizations should be creative in making employees aware of the mission statement. Placing it strategically in locations where employees gather will increase awareness and remind them of the goals of the organization. Videos outlining the details of the new mission statement are often useful; however, it is critical that employees have the opportunity to discuss the statement with members of management. Setting up meetings with members of management and frontline employees can often help uncover areas where the company does not meet the standards set by the mission statement. Communicating the mission statement to customers will make them feel valued and important. It can be sent to customers in a mass mailing or posted on signs in areas those customers frequent. It sets forth the goals of the organization so customers know what to expect when doing business with the company.
SWOT is an acronym for strengths, weaknesses, opportunities, and threats. SWOT analysis is a strategic planning tool that helps an organization match its internal strengths and weaknesses with external opportunities and threats. SWOT analysis is important and useful in creating and executing the organization’s mission statement. Often the best strategies for accomplishing the organization’s mission are revealed through the SWOT analysis. The best strategies are those that take advantage of strengths and opportunities, offset threats, and improve weaknesses.
Organizations should first begin by reviewing internal strengths and weaknesses. When analyzing an organization’s strengths it is important to identify distinctive competencies or strengths possessed by only a few competing firms. These distinctive competencies often become the competitive advantages that are included in the mission statement. Distinctive competencies can be found in financial resources, quality products and services, proprietary technology, or cost advantages. Organizational weaknesses are skills and capabilities that prevent an organization from implementing strategies that achieve its mission. They can be problems with facilities, lack of a clear strategic direction, internal operating problems, too narrow a product line, weak market image, or the inability to finance changes.
The next step is to identify external opportunities and threats. Organizational opportunities are circumstances in an organization’s environment that if capitalized on will result in above normal increases in economic performance. Examples of opportunities are related to the possibility of adding a new product line, increasing market growth, or diversifying into related products. Threats are viewed as circumstances that give rise to normal or below normal economic performance. They can be found in the ease of entry of competitors, increased sales of substituted products, demographic changes, slowed market growth, or increased competition.
Evaluation of the mission statement is necessary to ensure the organization is meeting its goals. If needed, new goals may have to be created in order to accommodate changes in the organization. It may be time to reevaluate what the organization is doing or where it is headed. This is a good time to think about entering into new areas or to begin doing things differently by rewriting part or all of the mission and vision statements.
In evaluating an organization’s performance, management must look at several different aspects of the organization. First, managers need to determine if the organization’s plans are clearly linked to its mission statement and related goals. Plans should be developed for both the short run and long run. Secondly, assigning jobs that are directly related to the achievement of organizational goals will help ensure they are attained. The goals should be communicated clearly so employees understand what tasks need to be carried out and what the rewards will be. Finally, when evaluating individual performance, the information gathered should be recent and compared to established standards.
Mission statements are often difficult to evaluate because they are written in a somewhat abstract form. They are, many times, not directly measurable and vaguely worded. ‘ 1 presents an example of how mission statements can be measured from the top of the organization to the bottom. Strategic goals are directly tied to the organization’s mission statement and apply to the organization as a whole. Tactical goals are departmental goals that support the strategic goals. Finally, operational goals are written at the individual level. Each one of these makes it possible to measure the organization’s mission statements. An organization’s likelihood of accomplishing its mission is increased as it creates strong and measurable goals at each level.
It is not necessary that the mission statement be measured in quantifiable terms. It may also be measured qualitatively. For example, “We will answer all of our customers’ questions and if we don’t know the answer, we will find out.” While this is not a quantitative statement it can be measured by monitoring customer service calls and setting operational goals for employees that revolve around follow up and thoroughness.
Mission and vision statements give organizations a focus and a strategy for the future. According to Bart and Tabone, they have become the cornerstones of organizations. They contribute to organizations’ success and can lead to increases in productivity and performance. They do not have to be reserved for the entire organization—each department or division can benefit from developing a mission statement, as long as they are not in contradiction to the company’s overall mission. Preferably, an individual department’s mission links it to the fulfillment of the overall company mission. Mission statements for functional departments provide the same benefits as they do for the entire organization.
In conclusion, mission statements provide a sense of direction and purpose. In times of change and growth they can be an anchor and a guide in decision making. The benefits far outweigh the disadvantages and challenges when looking at the potential for increases in profitability and returns. Defining an organization by what it produces and who it satisfies are major steps towards creating a sound and stable mission statement. Setting a company apart from the competition is probably one of the biggest advantages.
According to Bain & Company, mission statements are one of the most frequently used management tools. Organizations spend thousands of hours and dollars developing mission statements and then more resources again on public relations to unfold them to their stakeholders. This is not surprising when you review the often-stated benefits of mission statements:
Many authors have a variety of beliefs of what should be included in a mission statement. Ireland and Hill (1992) state that the mission statement should include the organizations goals, purpose, product and market scope and philosophical views. Davies and Glaister (1997) believe that it should include the organizations statement of purpose and inspirational view for the future. While Jamieson and Justice (1999) state that the framework for the development of a mission statement should begin with the organizations primary purpose, target market, core products or services, critical values and measures of success. One of the better practical definitions has been provided by Bartkus, Glassman and McAfee (2000) who basically state a mission statement is a statement to communicate a description of the firm to its current and prospective stakeholders to determine if they want to be involved with it.
The reality is, there is no one agreed definition of what should and should not be included in a mission statement. We believe a mission statement is a simple, short statement that clearly communicates the purpose of the organization to its stakeholders. Nothing more, nothing less. For practical purposes, many of the other aspects of mission statements cited above are actually found in other sections of an organization’s planning documents.
The delineation between vision and mission statements is far from clear. This is understandable when many of the benefits attributed to mission statements are also attributed to vision statements.
Like mission statements, there are many definitions for vision statements. Warren Bennis describes a vision as something you’ll never forget. Tom Peters, in his book Thriving on Chaos, describes a vision statement as inspiring, clear and challenging, makes sense to the marketplace, stable but challenged, a beacon and control, empowering, prepares for the future, honors the past and is lived in the details.
Both are useful definitions. We like to describe a vision statement as a ‘picture of the future’. While a mission statement talks about the organization’s purpose, (i.e. direction), a vision statement talks about what the organization would like to be. The easiest and most practical way of simply delineating between a mission and vision is to describe the mission as the journey and the vision as the destination.
Although we have found these definitions to be simple and practical, there are two points to remember when discussing mission and vision statements during your strategic planning process:
1. There is no one accepted definition.
2. Agreement on the definition you use is more important than the definition itself.
It depends. What you do need is to ensure that the organization has a direction and goal(s), that your key stakeholders support that direction and goal(s), and that your structure, resources and skills are aligned to facilitate moving in that direction and maximize your opportunity to achieve those goals. If you believe you need a mission and/or vision statement, then you probably do. However, just having a mission and/or vision statement, even if they are included in a planning document, posted on a plaque on the wall or provided to employees on business cards certainly does not, unto itself, ensure success.
Mission and vision statements are management tools that if used appropriately, have the potential to help improve your organization’s probability of success. However, it’s important to keep in mind, that these are only two of the many tools available to your organization in the development of your strategy.
Many small business owners never take the time out to explore their reasons for being in business. They are so caught up in day-to-day activities they fail to see the big picture. So what are the benefits of having an articulated Vision, Mission and Objectives for your business?
Actually, it all starts one step removed from this. It really starts with establishing your core values. Lots of people in their middle years instinctively know what their core values are but they cannot tell you what they are when questioned about it. Core values are what get you up out of bed in the morning; a strong work ethic; a desire to contribute; the need to support your family; respect for your fellow workers or subordinates. They are the driving force in your life. They are immutable and do not change over time.
Once you have gleaned what your core values are, then you can move on to establish what your Vision is. Your Vision is your long term goal. It can embrace your business and your personal life. It may be something like building your business into a $10 million asset that you can sell aged 60 and retire to a beach house in Florida. It could be to create something of value that you can pass on to your children. It might even be to create something that offers benefits to your community that will outlive you. It can be deeply personal.
Your Mission flows from your Vision. Your Mission is a written statement that provides a clear sense of direction to all of the stakeholders in your business. It embraces the commitment of the company to staff, customers, and the community at large. It may articulate the company ethos, core beliefs of the owners, service levels, quality, excellence, training and commitment. It should be a shared set of standards and beliefs that all of your staff buy into and live every day.
Setting objectives is the next stage of the process. It is all about how you deliver on the promises made by your Mission. If you have clarity in both your Vision and Mission, it is easy to decide on the objectives. Objectives may be set for each key area of your business along with a time-line for completion. They may be corporate, product, market, sales, financial, operations, or staff related or any combination of these.
As you can see, this is a trickle down system with higher level aspirations that flow down to every level of the business and become the glue that holds everything together. The benefits are clear and unambiguous. It is a team building exercise that creates focus and commitment that can drive a business forward. Every step you take is in pursuit of your articulated end game.
In just over a decade, CN Rail has gone from money-losing crown corporation to one of the top railroads in North America. Employees follow a strong company culture incorporating five values that revolve around customer service, balancing service with cost control, and the safety and development of its employees. Not surprisingly, corporate culture starts with president and CEO Hunter Harrison and works its way down through the company’s 22,000 employees.
In the 2006 Canadian Corporate Culture Study conducted by executive search firm Waterstone Human Capital, 92% of executives defined corporate culture as “the behaviours of people and the values of the organization.” The leaders of these major Canadian corporations almost universally agreed that a healthy corporate culture is critical to success and that culture has an impact on organizational health and financial performance. In our last article we wrote about the three-stage process of defining that corporate culture. In this week’s article we’ll look at the importance of aligning your corporate culture with your business strategy and how to communicate that throughout your entire organization.
At CN, values are a core part of the company’s corporate culture. These values, along with behaviours such as “passion” and “integrity,” run throughout the organization and CN regularly communicates them to all its employees. One way Harrison did this was by publishing How We Work and Why, a hardcover distributed to all employees two years ago. The railroad also regularly runs three-day motivational retreats for executives called Hunter Camps. Led by Harrison and Les Dakens, SVP people, the Hunter Camps not only teach leadership skills and reward managers for a job well done, but they also serve to reinforce the company’s values and employee behaviour. The goal, says Dakens, is to have 2,000 employees go through these camps by the end of 2008. In addition, CN last year introduced performance scorecards for all its employees. The performance appraisal recognized and evaluated employees against the company’s values. “A lot of these people have never had this formal kind of written recognition that they do a good job,” says Dakens.
According to the Corporate Culture study, 51% of organizations surveyed use everything from company events and town hall meetings to intranets and informal gather
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