For many years, the mission statement has been the primary organizational communication tool used to describe the firm to its stakeholders. According to Peter Drucker, often called the "father of management," a mission statement is the "foundation for priorities, strategies, plans, and work assignments" (Drucker, 1974). According to Drucker, it is the mission statement that distinguishes one organization from another. The mission statement provides the firm's "reason for being." Drucker also emphasizes that a mission statement is essential to the formation of the company's objectives and strategies.
The Leader to Leader Institute, established by Peter Drucker, has much to say about an effective mission statement. Drucker stressed that the mission statement should communicate the core of the organization with a precise statement of purpose. He suggested that it should be about three sentences long and touch on four topics including who we are, what we do, what we stand for, and why we do it. This is a lot to cover in a short three sentence statement. Drucker also felt that the mission statement should address distinct stakeholder groups including owner/investors, customers, and employees/society. The authors have discovered that many large corporations do not include these important stakeholders in their current mission statements.
Mission statements should include all of the central characteristics of the company including the firm's purpose, unique qualities, values, critical stakeholders, and basic goals/objectives. Mission statements have been called by a number of various titles including creed statements, statements of philosophy, statements of belief, and statements of business purposes (David, 2005). Fred David stresses that these statements should reveal both what a firm wants to be as well as whom it wants to serve. Therefore, a good mission statement should specifically mention important stakeholders such as customers and employees.
David also states that the firm's "reason for being" should be clearly stated in a firm's mission statement (David, 2009). He argues that a well written mission statement should provide important information such as the products and services offered by the firm and the primary target markets served. David believes that a mission statement "identifies the scope of the firm's operations in product and market terms" (Pierce & David, 1989).
Robbins and Coulter emphasize that firm goals must reflect the mission statement. (Robbins & Coulter, 2012). They further state that the mission is a broad statement of the organization's purpose providing a guide to all members of the organization. Many other authors emphasize the importance of a well written mission statement. For example, Annie McKee feels that without a well defined and developed mission statement, the firm loses its focus (McKee, 2012). McKee believes the mission statement must describe what the company stands for, what it does, who it considers important. She also believes that missions aid managers in decision making and integrating short and long term goals and objectives.
Jeffery Abrahams reviewed over 300 mission statements from the largest U.S. firms. He found that these pronouncements reflected the firm's values and priorities as well as providing a statement of purpose (Abrahams, 1999). Samuel and S. Trevis Certo argue that the creation of a mission statement is a critical part of the strategic management process (S. & S.T. Certo, 2012). The strategic management process requires a thoughtfully written mission statement to provide some organizational direction for its managers. This belief is shared by Hitt, Black, and Porter (M.A. Hitt, J.S. Black & L.W. Porter, 2012). They feel that a mission statement must articulate the primary purpose of the organization. Other authors discuss the possible components of this primary purpose which may include basic company philosophy, primary products or services, customers served, obligations to stockholders and employees, and concern for the environment. (C. Rarick and J. Vitton, 1995).
Schermerhorn, et. al., believe that good mission statements state whom the firm will serve and what purpose they are serving in society (Schermerhorn, et.al.). Currently many firms are clearly stating in their mission statement their goals of positively affecting society and preserving the environment. Wheelen and Hunger stress that a well designed mission statement defines the firm's "fundamental, unique purpose" that sets the firm apart from other similar companies (T. Wheelen and J. Hunger, 2010).
Finally, Thompson, et.al., state that a mission statement must describe the firm's "current business and purpose" (Thompson, et.al., 2012). These authors emphasize that an effective mission statement should accomplish a number of things including identifying the firm's products or services, specify customer groups or markets served, and giving the company its own identity. They believe the latter goal of creating the firm's unique identity is especially important. To accomplish all of these goals in a concise statement, the firm's management must carefully construct the mission statement and update it when appropriate.
The authors agree that a mission statement is a critically important communication that organizations must create and communicate to all stakeholders. This short declaration must identify important stakeholders as well as describe the firm's identified goals and objectives. This paper reviews the last four studies completed by the authors and describes the latest review of 2012 mission statements of the 25 largest firms in the U.S. and nine other countries. Similarities and differences will be summarized at the end of this paper. In addition, trends in U.S. mission statements from 2001 to 2012 are also reviewed.
PREVIOUS MISSION STATEMENT RESEARCH
The authors began their mission statement research eleven years ago. Four of the authors' mission statement articles have been published in the Academy of Managerial Communications Journal (King, 2001) and the Academy of Strategic Management Journal (King, Case & Premo, 2010), (King, Case & Premo, 2011) and (King, Case & Premo, 2012). These studies have expanded in size in an effort to compare and contrast U.S. mission statements with those of foreign countries. A brief review of each study is presented in the following paragraphs.
The authors' 2001 study involved the Fortune 100 firms in the United States for that year. Table 1 summarizes the results of that study. The 100 largest U.S. company mission statements were reviewed for content with emphasis in two areas. First, the identified stakeholders were summarized including employees, customers, and stockholders. Second, the goals/objectives of the firm that were identified in the mission statements were summarized. Providing a quality product or service that provided value to customers was a typical example of these goals. Table 1 is a summary of the 2001 mission statements.
The left column of Table 1 is a summary of the identified stakeholders. As one might expect, the most often mention stakeholders were customers and stockholders (61% and 34% respectively). The third most often mentioned stakeholder group was employees (21%). The right side of the table is a listing of the most common goals or objectives of the firm. The goal of producing a quality product or service and following established core values were most common. Striving for a leadership position in the industry (17%) and the desire to conduct global operations (15%) were the next most listed goals of the organization. Notice that the goal of maintaining ethical operations was absent from the list. This may be, at least partly, the result of the Sarbanes-Oxley Act not becoming law until 2002.
The authors' next mission statement project was in 2008 when the Fortune top 50 U.S. corporations were studied. Table 2 shows the total number of organizations that included the listed stakeholders and goals/objectives in their mission statement in 2008.
In 2008, the most commonly identified stakeholders were customers and employees. On the goals/objectives side, the most frequently recognized items were the desire to produce a quality product and the attempt to conduct global operations. Following closely behind was the goal of conducting ethical operations that was reported by 15 of the top 50 firms.
In order to better review the results of these two studies, Table 3 (below) converts the information from raw numbers (used in Tables 1 & 2) to percentages for easier comparisons. These percentages show that the use of the term "communities" increased five-fold from 2001 to 2008. Firms were beginning to recognize the importance of the communities in which they operated. Customers continued to be the most commonly included stakeholder (61%/62%). The large corporations continued to emphasize the marketing concept...