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A mission statement is a short statement of an organization's purpose, identifying the goal of its operations: what kind of product or service it provides, its primary customers or market, and its geographical region of operation. It may include a short statement of such fundamental matters as the organization's values or philosophies, a business's main competitive advantages, or a desired future state—the "vision".
A mission is not simply a description of an organization by an external party, but an expression, made by its leaders, of their desires and intent for the organization. The purpose of a mission statement is to focus and direct the organization itself. It communicates primarily to the people who make up the organization—its members or employees—giving them a shared understanding of the organization's intended direction. Organizations normally do not change their mission statements over time, since they define their continuous, ongoing purpose and focus.
- Key market: the target audience
- Contribution: the product or service
- Distinction: what makes the product unique or why the audience should buy it over another
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The sole purpose of a mission statement is to serve as a company's goal/agenda, it outlines clearly what the goal of the company is. Some generic examples of mission statements would be, "To provide the best service possible within the banking sector for our customers." or "To provide the best experience for all of our customers." The reason why businesses make use of mission statements is to make it clear what they look to achieve as an organization, not only to themselves and their employees but to the customers and other people who are a part of the business, such as shareholders. As a company evolves, so will their mission statement. This is to make sure that the company remains on track and to ensure that the mission statement does not lose its touch and become boring or stale.
The North American magazine and website that carries news stories about entrepreneurship, small business management, and business, Entrepreneur, explains the purpose of a mission statement as the following:
- "The mission statement reflects every facet of your business: the range and nature of the products you offer, pricing, quality, service, marketplace position, growth potential, use of technology, and your relationships with your customers, employees, suppliers, competitors and the community."
It is important that a mission statement is not confused with a vision statement. As discussed earlier, the main purpose of a mission statement is to get across the ambitions of an organisation in a short and simple fashion, it is not necessary to go into detail for the mission statement which is evident in examples given. The reason why it is important that a mission statement and vision statement are not confused is because they both serve different purposes. Vision statements tend to be more related to strategic planning and lean more towards discussing where a company aims to be in the future.
Provides direction: Mission statements are a way to direct a business into the right path. They play a part in helping the business make better decisions which can be beneficial to them. Without the mission statement providing direction, businesses may struggle when it comes to making decisions and planning for the future. This is why providing direction could be considered one of the most advantageous points of a mission statement.
Clear purpose: Having a clear purpose can remove any potential ambiguities that can surround the existence of a business. People who are interested in the progression of the business, such as stakeholders, will want to know that the business is making the right choices and progressing more towards achieving their goals, which will help to remove any doubt the stakeholders may have in the business.
A mission statement can act as a motivational tool within an organisation, and it can allow employees to all work towards one common goal that benefits both the organisation and themselves. This can help with factors such as employee satisfaction and productivity. It is important that employees feel a sense of purpose. Giving them this sense of purpose will allow them to focus more on their daily tasks and help them to realise the goals of the organisation and their role.
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Although it is mostly beneficial for a business to craft a good mission statement, there are some situations where a mission statement can be considered pointless or not useful to a business.
Unrealistic: In most cases, mission statements turn out to be unrealistic and far too optimistic. An unrealistic mission statement can also affect the performance and morale of the employees within the workplace. This is because an unrealistic mission statement would reduce the likelihood of employees being able to meet this standard which could demotivate employees in the long term. Unrealistic mission statements also serve no purpose and can be considered a waste of management's time. Another issue which could arise from an unrealistic mission statement is that poor decisions could be made in an attempt to achieve this goal which has the potential to harm the business and be seen as a waste of both time and resources.
Waste of time and resources: Mission statements require planning. This takes time and effort for those who are responsible for creating the mission statement. If the mission statement is not achieved, then the process of creating the mission statement could be seen as a waste of time for all of the people involved. A lot of thought and time can be spent in designing a good mission statement, and to have all of that time wasted is not what businesses can afford. The wasted time could have been spent on much more important tasks within the organisation such as decision-making for the business.
- “What do we do?” — The mission statement should clearly outline the main purpose of the organisation, and what they do.
- “How do we do it?” — It should also mention how one plans on achieving the mission statement.
- “Whom do we do it for?” — The audience of the mission statement should be clearly stated within the mission statement.
- “What value are we bringing?” — The benefits and values of the mission statement should be clearly outlined.
When designing a mission statement, it should be very clear to the audience what the purpose of it is. It is ideal for a business to be able to communicate their mission, goals and objectives to the reader without including any unnecessary information through the mission statement.
Richard Branson has commented on ways of crafting a good mission statement; he explains the importance of having a mission statement that is clear and straight to the point and does not contain unnecessary baffling. He went on to analyse a mission statement, using Yahoo's mission statement at the time (2013) as an example. In his evaluation of the mission statement, he seemed to suggest that while the statement sounded interesting, most people would not be able to understand the message it is putting across. In other words the message of the mission statement potentially meant nothing to the audience.
|“||This further backs up the idea that a good mission statement is one that is clear and answers the right questions in a simple manner, and does not over complicate things. An example of a good mission statement would be Google's, which is "to organise the world's information and make it universally accessible and useful."[not in citation given]||”|
- "Mission Statement". Small Business Encyclopedia. Entrepreneur Media, Inc. 2017. Retrieved 2015-11-01.
- Gibson, C. Kendrick; Newton, David J.; Cochran, Daniel S. (1992). "An empirical investigation of the nature of hospital mission statements". In Brown, Montague. Health Care Management: Strategy, Structure, and Process. Health Care Management Review Series. Gaithersburg, MD: Aspen Publishers. pp. 47–58. ISBN 978-0-8342-0299-3. OCLC 25281735. Retrieved 2017-04-13 – via Google Books.
A frequently quoted definition of a mission statement is that it ‘is a broadly defined but enduring statement of purpose that distinguishes the organization from others of its type and identifies the scope of its operations in product (service) and market terms.’
- Hill, Charles; Jones, Gareth (2008). "Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage". Strategic Management: An Integrated Approach (8th ed.). Mason, OH: South-Western Educational Publishing. p. 11. ISBN 978-0-618-89469-7. OCLC 238715134 – via Google Books.
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