Organizational Flux: Reviewing a Company's Mission Statement - Research Paper Example

?Organizational Flux: Reviewing a Company's Mission ment Most organizations and companies express their goals in a simple, formal, and usually very few lines. This assertion of purpose, known as a mission statement, describes the “very foundation of a company’s enterprise – what it does, for whom, and why” (Birnbaum, 2004). To become effective, a mission statement should state the core of company values. As such, it should clearly express the ‘ethos’, ‘culture’ and ‘feel’ of an organization (Talbot, 2003). In other words, a company’s mission statement should generate principles that are aligned to how the company operates and how it gets its business done. It should also be the standard with which the company is willing to be evaluated. According to Bart and Tabone (1998), mission statements should be ‘enduring, passionate, and lacking in specific quantitative measurements’. However, there are circumstances when a company finds its mission statement outdated and is often misaligned with new business objectives. There are times when a company’s mission statement is no longer “relevant in addressing to new realities” (Radtke, 2009) and thus be a subject for review to “reflect changes in institutions, as well as in the environments within which the institutions are called on to function” (Bart & Tabone, 1998). This paper examines such instances when companies modify and alter their mission statements in accordance to the changes in corporate values and the business environment. The paper should further explain why corporations are spending time reviewing their mission statement and why this has become an increasing concern for the organization. Mission Statement and Its Impact The main benefit of crafting an effective mission statement is that it creates an impact to people who get exposed to it. According to Abrahams (2007), a well-crafted mission statement serves as a “practical focus for individuals within the corporation”. This means that company statements often inspire and influence certain needs and aspirations of the organization and its employees. When assimilated into the organization’s culture, mission statements become an integral part of the strategic planning process of the company (David & Pierce III, 1987). In other words, it helps company managers and employees to stay focused on the organization’s goals. However, a mission statement is not only be beneficial to people within the company but also to its target audience – customers, investors, and possibly donors. Birbaum (2004) emphasized the significant impact of a company’s mission statement to its customers because it is what defines them. When people are presented with an organization’s statement of intent, it gives them a clear picture of what the organization is trying to do. Because of these reasons, mission statements are considered as “an actual blue print for a company’s future and ultimately, its success” (Abrahams, 2007). When the organization successfully integrates the goals and values expressed in its mission statement and acts according in accordance to its principles, then it secures its morale and strengthens its reputation as a company. On the other hand, when a company succumbs to weaknesses and failures inside and outside the organization, its morale crumbles and its reputation becomes shaky. Mission Statement and Its Limitations An organization’s mission statement is central to its business strategy. As such, it is important that company statements should be, according to Bart and Tabone (1998), “enduring (i.e., they should not have a time frame); passionate (i.e., they should be emotionally charged); and lacking in specific quantitative measurements (i.e., financial goals)”. However, Grunig & Kuhn (2008) further extends these characteristics of mission statements into reasons why it should be flexible and dynamic. The authors argued that while a mission statement does not include a time frame for its validity, it should nevertheless remain under review because changes in the environment or within the company remain inevitable. This means that if a company’s statement hinders or no longer contributes to its success, then it should be revised or replaced. They even suggested that a review of corporate mission statement is necessary after completing strategic analysis so that necessary changes can be made. Furthermore, the principles embedded within the statement may be aligned with corporate values but it may also present a limitation, to a greater or lesser extent, with company decisions. For instance, the decline of railroad industry in the US was brought about by its insistence on the mission that “We’re in the railroad business.” This was examined by Theodore Levitt in the 1960’s when he wrote the article “Marketing Myopia” in The Harvard Business Review. In his essay, Levitt argued that the statement led the railroad companies to think in terms of tracks of iron and the rights of way across America. However, what these railroad companies missed is the opportunity to participate in the growth segments of the transportation industry – in automobiles, trucks, and airplanes. According to Levitt, if the railroad companies had said "We're in the transportation business," they might have fared much better. Lastly, while mission statements create the overall framework of the company, its revision and production must be completed before business strategies of the company could even start or develop. This because according to Birnbaum (2004), the objectives set out in the mission statement must be “respected both when developing strategic and operational plans”. However, there are also instances when company statements are not relevant to the strategy development of a company but its effect to other areas. For example, a mining company’s responsible use of the natural resources and environment should already be incorporated in its mission statement before strategic operations are done to develop the business. Mission Statement and Values Examination According to Talbot (2003), every organization, whether in the public, private, or voluntary sector has values. Company values are the basis of reputation, morale and organizational character. In other words, every member of the company looks up to its mission statement and examines its relevance to who they are and what the company believes in. Company employees need to align their company’s values with their own, making sure that it permeates in their day to day behavior within the organization. However, there are instances when these values are tested. In the life of every company, there are times when corporate leaders need to step back and carefully reflect on their values themselves when faced with major challenges inside and outside of the organization. As outlined by Talbot (2003), values examination arises under the following circumstances: when radical change is imposed from without by developments in technology, innovations in the sector, new statutory regulations. when a shake-up is needed to boost morale, secure reputation, improve performance. when change is imposed from within by a new management, a crisis of culture, a merger with an organization that does things differently. when a significant organizational failure mandates a radical rethink of organizational policy. When these situations take place in the organization, corporate stakeholders immediately look back to the underlying principles of the organization’s mission statement. In this way, they will be able to examine if their organizational values are still relevant to the existing change of their environment. Mission Statement & Re-evaluation As companies continue to address problems, its main business purpose may not change but how it does business evolves. In this case, Radtke (2009) strongly suggests that a company’s mission statement must be “updated, altered, or changed dramatically in order to address new realities”. Because while company statements tend to be permanent in its purpose, there are specific of such statements that are, from time to time, “updated to reflect changes in institutions, as well as in the environments within which the institutions are called on to function” (Barth & Tabone, 1998). Here are some instances that validate the modification of a company’s mission statement: A.) Business expansion - If the company altered its product line, then the original mission statement is no longer relevant to its current business. Sample case #1: Microsoft changed its original mission statement paraphrased: “To help folks through notable software - any time, any place, and on any device” and made it into “To empower folks and businesses throughout the community at large to derive their full potential”. The company reasoned that it considered its future software goals and new product range. B.) Business specialization – Some organizations might find its mission statement too broad for its current operation. In this case, changing the company statement is necessary to attain a specific goal that is both realistic and attainable. Sample case #2: A certain women’s group might have originally wrote, "We aim to provide social services to women with chronic illnesses". However, due to lack of funds, the organization later realized its financial limitations and instead changed its mission statement into "We aim to provide social services to young mothers with cancer." C.) Changing times – A corporate mission becomes obsolete when it is no longer relevant to what is happening outside its business environment. Sample Case #3: A charitable institution might want to adapt to the major technological advancement in the society. Instead of providing free skills and instructions to poor people in typing and home economics, the organization might change its mission to one that provides technical instruction in computers, personal finance and math. D.) Addressing a Merger or Split – Sometimes, a company breaks and joins larger companies for its survival. In care of organizational splits, statements may be altered to reflect the change. Sample Case #4: When a smaller pharmaceutical firm was bought by a much large drug company, it must adhere to its mission statements to demonstrate the change occurred in its company. Surely, once a compromise is done between two companies, the future revival and eventual success of the company will somehow be restored. Mission Statement & Its Evolution From the discussions above, it can be inferred that mission statements need to go through necessary evolution to adapt and withstand the test of time. Radtke (2009) stated that if the organization’s mission statement has specifically been more than five years, and then it might be necessary to fine tune or even rewrite company statement. It might be that the original statement may no longer be relevant as it ceases to speak for the staff, board members, and supporters of the company. To address the changing needs of companies, forward-thinking organization must gathered annually to review its mission statement as suggested by Bart &Tabone (1998). The authors stated that company statements are adapted quickly by its members for relevance and focus of business. More specifically, companies should be subjected to both external and internal assessment so that its business concerns should be addressed in relation to its society. The internal evaluation should focus on how members in the organization interpret their mission statement, . The external assessment — which includes all of the businesses stakeholders — is valuable since it offers a different perspective. These discrepancies between these two assessments can give insight on the organization's mission statement effectiveness. In addition, mission statements need to be subjected to an internal assessment and an external assessment which is done yearly. Internal assessment means that you should focus on how members inside the organization examine the following: 1.) interpret the mission statement, 2.) communicate its objective, 3.) create stories to illustrate the company’s mission, and 4.) craft every member’s personal values in accordance to the company’s overall mission statement. On the other hand, external evaluation of the company should include all stakeholders involved in the business which includes its business partners, investors, and most importantly, its customers. Through the mission statement, people outside the organization should be able summarize what the company is trying to do and how it will get its business done. The statement should not only enable the company stakeholders to give an impression of its action but also to reflect on the standards that it operates. When the difference between external and internal evaluations is examined and addressed, only then can the company give insight to the effectiveness of its mission statement. If overhauling the statement is arguably critical, then there is no reason why change must be carried out. References Abrahams, Jeffry. 101 Mission Statements from Top Companies: Plus Guidelines for Writing Your Own Mission Statement. California: Ten Speed Press, 2007. Bart, Christopher K. and John C. Tabone. “Mission Statement Rationales and Organizational Alignment in the Not-for-Profit Health Care Sector”. Health Care Management Review. 23.8 (1998): 54-69. Birnbaum, Bill. “Developing your Mission Statement”. Strategic Thinking: A Four Piece Puzzle. California: Douglas Mountain Publishing, 2004. David, Fred & Pearce, III, John A. “Corporate Mission Statements: The Bottomline”. The Academy of Management Executive. 1.2 (1987): 109-116. Grunig, Rudolf & Richard Kuhn. “Revision or production of the mission statement.” Process-based Strategic Planning. Germany: Springer Berlin Heidelberg, 2008. Levitt, Theodore. “Marketing Myopia”. The Harvard Business Review. Reprint 75507 (1998): 1-14. M3 Planning, Inc. Developing your Mission Statement: guidelines, examples, and exercises for all organizations. Nevada: M3 Planning, Inc., 2008. Doran, Roslyn & Colm O'Gorman. Mission Statements in Small and Medium-Sized Businesses. Journal of Small Business Management. 37.4 (1999): 59. May 15, 2011. Radtke, Janel M. “How to Write a Mission Statement.” Strategic Communications for Nonprofit Organization: Seven Steps to Creating a Successful Plan. Radtke, Janel M. and Sally J. Paterson . 2nd Edition. New Jersey: John Wiley & Sons Inc., 2009. Talbot, Marianne. Make Your Mission Statement Work. 2nd Edition. United Kingdom: How to Books Ltd., 2003. Read More