Strategic Management: Formulation and Implementation

Mission Formulation

For any given firm, organizational mission is normally summarized and documented in a mission statement.

The titles of the mission statements are quite varied. They include "corporate philosophy," "objectives," "credo," "our way," "guidelines," "our purpose," and so on. For example, the Figure presents Ford Motor Company's "Mission, Values, and Guiding Principles".

But despite the variety of names, the idea is the same: to define what is important to the company. Therefore, in formulating its mission, an organization must base on the four elements of mission described by Campbell and Nash: purpose, strategy, values, and behavioral standards (see above).

In practice, mission statements take on a variety of forms and lengths. But each mission statement has a personality which is unique and reflective of the individuals ideals of the corporate directors. Although there are differences in the mission statements of various companies, there are also many similarities.

The kinds of information contained in mission statement vary somewhat from organization to organization. Most mission statements cover the following major topics:

The need to assess the quality of a mission statement is a problem that is being faced by many management teams and consultants.

Goodstein, Nolan and Pfeipher provide the following ten criteria for evaluating mission statements:

  1. The mission statement is clear and understandable to all personnel, including rank-and-file employees.
  2. The mission statement is brief enough for most people to keep it in mind. This typically means one hundred words or less, which is possible.
  3. The mission statement clearly specifies what business the organization is in. This includes a clear statement about:
    • "What" customer or client needs the organization is attempting to fill, not what products or services are offered;
    • "Who" the organization's primary customers or clients are;
    • "How" the organization plans to go about its business, that is, what its primary technologies are; and
    • "Why" the organizations exists, that is, the overriding purpose that the organization is trying to serve and its transcendental goals.
  4. The mission statement should identify the forces that drive the organization's strategic vision.
  5. The mission statement should reflect the distinctive competence of the organization.
  6. The mission statement should be broad enough to allow flexibility in implementation but not broad enough to permit a lack of focus.
  7. The mission statement should serve as a template and be the means by which mananagers and others in the oragnization can make decisions.
  8. The mission statement must reflect the values, beliefs, and philosophy of operations of the organization.
  9. The mission statement should be achievable. It should be realistic enough for organization members to buy into it.
  10. The wording of the mission statement should help it serve as an energy source and rallying point for the organization.
All ten criteria must met for the mission statement to fully accomplish all that such statements.

The process of writing a mission statement can be broken down into several distinct steps; these include:

  1. Establish the basic parameters;
  2. Collect and assemble possible ideas for inclusion;
  3. Determine the limits;
  4. Set the priorities of each statement;
  5. Carefully express each of the ideas;
  6. Add explanatory statements;
  7. Establish the document's apperance;
  8. Gain final approval.

The principal value of mission statement as guide to strategic action is derived from its specification of the ultimate aims of the firm.