Characteristics and Components of Mission Statement

A mission statement is a critical component of an organization's strategic management process. It serves as a declaration of the organization's purpose, guiding its actions and decisions. Below are the key characteristics that define a strong and effective mission statement.

1. Declaration of Attitude

• Broad in Scope: A mission statement is typically broad in scope for two main reasons:
  • It allows for the consideration of a range of feasible alternative objectives and strategies.
  • It is designed to reconcile differences among the diverse stakeholders within an organization, ensuring alignment and reducing conflict.

2. Customer Orientation

• Focus on Customers: A good mission statement clearly describes the organization's purpose in relation to its customers, outlining how it intends to meet their needs through its products or services.
• Reflecting Customer Anticipations: It should reflect the expectations and anticipations of customers, showing that the organization is committed to fulfilling those needs.
• Utility of Products: Effective mission statements identify the utility or benefit that the firm's products or services provide to its customers.

Examples of Customer-Oriented Mission Statements:

• AT&T: Focuses on communication rather than just telephones.
• ExxonMobil: Emphasizes energy rather than limiting to oil and gas.
• Union Pacific: Centers on transportation rather than just railroads.
• Universal Studios: Highlights entertainment rather than just movies.

3. Characteristics of a Mission Statement

A strong mission statement typically embodies the following nine characteristics:

1. Broad in Scope: Avoids specific monetary amounts, numbers, percentages, ratios, or objectives to maintain flexibility and inclusivity.
2. Concise: Less than 250 words in length, ensuring it is succinct and easily understood by all stakeholders.
3. Inspiring: Should inspire and motivate employees and stakeholders, conveying a sense of purpose and ambition.
4. Utility-Oriented: Clearly identifies the utility of the firm's products or services to its customers, emphasizing the benefits provided.
5. Social Responsibility: Reveals the firm's commitment to being socially responsible, demonstrating care for society and its stakeholders.
6. Environmental Responsibility: Shows that the firm is environmentally responsible, reflecting its commitment to sustainability and environmental stewardship.

Nine Components:

The mission statement should address the following components:

1. Customers: Who the company serves.
2. Products or Services: What the company offers.
3. Markets: Where the company competes.
4. Technology: The technology used to deliver products or services.
5. Concern for Survival/Growth/Profits: How the company plans to sustain itself.
6. Philosophy: The core values and beliefs that guide the company.
7. Self-Concept: The company’s strengths and competitive advantages.
8. Concern for Public Image: How the company is viewed by the public.
9. Concern for Employees: The company’s commitment to its workforce.

These characteristics collectively ensure that a mission statement serves as an effective guide for an organization's strategic direction, helping to align the efforts of all stakeholders toward common goals.