An international mission statement comparison: United States, France, Germany, Japan, and China.

Author:King, Darwin L.
Position::Report
 
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INTRODUCTION

Since the 1970s, mission statements have been the organizational communication that best describes what the firm is about to all stakeholders. According to Drucker, the mission statement is the "foundation for priorities, strategies, plans, and work assignments" (Drucker, 1974). According to Peter Drucker, it is the mission statement that distinguishes one organization from another. It also provides the firm's "reason for being" that is communicated to all interested stakeholders. In addition, Drucker states that a mission statement is essential to the formation of the company's objectives and strategies.

Mission statements are, typically, fairly short containing only one or two paragraphs. Mission statements 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 creed statements, statements of philosophy, statement of beliefs, and statements of business purposes (David, 2005) David states that these statements should reveal both what a firm wants to be as well as whom it wants to serve. Therefore, the stakeholders named and the goals and objectives identified are analyzed in this paper by the authors.

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, the primary target markets served, and the firm's concern for growth, efficiency, employees, stockholders, the environment, and long-term profitability. David has identified nine essential components of a well written mission statement. These include a mention of customers, products or services, markets, technology, concern for survival, growth, and profitability, philosophy, self-concept, concern for public image, and concern for employees (David, 2005). From the authors' experience, there are very few mission statements that include all of these items. Many of the mission statements included in the appendix of this paper contain three or fewer of these areas.

Many other authors have offered similar views on the purpose of a mission statement. Annie McKee feels that missions must describe what an organization is, what it does, and what it stands for (McKee, 2012). McKee also believes that without a well defined and established mission statement, the firm may lose its overall focus. In addition, she states that a dynamic mission statement aids managers in making decisions, motivating employees, and integrating short-term and long-term goals and objectives. Jeffery Abrahams reviewed over 300 mission statements from the largest U.S. firms and found that these communications represent an enduring statement of purpose for the companies and reflect their values and priorities (Abrahams, 1999). It is understandable that a mission statement is one of the most important communications for the company and must be thoughtfully developed.

Samuel and S. Trevis Certo argue that the creation of a mission statement is a vital part of the strategic management process (S. & S.T. Certo, 2012). The strategic management process requires the establishment of an organizational direction which typically first requires the creation of an accurate mission statement. This view is shared by Hitt, Black, and Porter (M.A. Hitt, J.S. Black & L.W. Porter, 2012). They also believe that the strategic management process requires a statement that articulates the fundamental purpose of the organization which often includes several components or parts. These can include the company philosophy, company identify or self-concept, principle product or services, customers and markets, geographic focus, obligation to stockholders, and commitment to employees (C. Rarick and J. Vitton, 1995). Many authors believe that an accurate mission statement cannot be prepared without an analysis of both the firm's external environment and its internal resources and abilities.

The authors agree that mission statements are critically important for an organization as it describes to all stakeholders its strengths, purposes, and goals/objectives. In this paper, the authors have decided to compare U.S. mission statements with four non-English speaking nations. The intent is to compare mission statement content concerning the stakeholders identified as well as the recognized goals and objectives of the organization. Earlier research of the authors is presented first in the following paragraphs.

PREVIOUS MISSION STATEMENT RESEARCH

The authors began their mission statement research over ten years ago. Three earlier articles have been previously 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). 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 mission statements were reviewed for content in two areas. First, the stakeholders identified by the company were summarized. Stakeholders included employees, shareholders, customers, suppliers, and others. Second, the firm's goals/objectives stated in the mission statement were analyzed. These included, among others, an emphasis on core values, attempts to produce a quality product or service, striving for industry leadership, and concern for the environment.

The left column of Table 1 summarizes the identified stakeholders. By far, customers and stockholders were mentioned most often in these 2001 mission statements (61% and 34% respectively). Employees ran a distant third with only 21% of the missions identifying this stakeholder. The right side of Table 1 lists the most frequently identified goal or objective of the firm. In this case, producing a quality product or service and establishing a set of core values were each found in 25% of the 2001 mission statements. Maintaining a leadership position (17%) and providing global operations (15%) were the next most commonly mentioned goals and objectives. It is apparent that customers were considered to be the most important entity identified in the mission statements of 2001. Since these missions existed prior to the passage of the Sarbanes-Oxley Act on July 30, 2002, the importance of ethical behavior was not emphasized as only three firms included that goal/objective.

The authors' analysis of mission statements continued in 2008 when the 50 largest U.S. firms were studied (from Fortune 100 list). Table 2 shows the number of firms that included the various stakeholders and goals/objectives first identified in the 2001 study.

In 2008, the most often identified stakeholders were customers and employees. The top two goals/objectives included in the missions this year were striving to produce a quality product or service and the emphasis on global operations. There were some significant differences in the mission statements of 2001 compared with those in 2008. For example, the use of current technology was mentioned in only one of the top 50 firms in 2008. Also, competitors were mentioned in 9% of the firms reviewed in 2001 and in 2008 none of the top 50 firms mentioned this stakeholder. In order to better review the results of these two studies, Table 3 converts the information from raw numbers (used in Tables 1 & 2) to percentages for easier comparisons.

A number of significant trends can be identified over these eight years. First, in the stakeholder area, the use of the term "community" or "communities" increased significantly. Firms recognized the need to mention the people and places (communities) where they conducted operations in their mission statements. From only 6% in 2001 to 30% in 2008, these large organizations recognized the need to care and support local communities. For example, in 2008, Valero Energy's mission emphasized the firm's desire to take a leadership role in the communities where they live and work through company support and employee involvement. Customers continued to be the most mentioned stakeholder with over 60% of the firms including them in both years. Employees were mentioned more often in 2008 than in 2001 (34% compared to 21%).

There were also some significant trends as far as identified goals/objectives are concerned. For example, the importance of ethical behavior increased ten-fold over this period. From 3% in 2001 to 30% in 2008, it is obvious that the passage of the Sarbanes-Oxley Act passed in 2002 had a considerable impact on missions of these large organizations. Likewise, the number of firms that included concern for the environment increased from 9% in 2001 to 16% in 2008. As discussed above, this is no doubt related to the increased attention given to community.

Other trends in the goals/objectives mentioned in these statements involve the production of a quality product or service and the desire to conduct operations on a global scale. The firms that identified the production of quality products or services increased from 25% in 2001 to 52% in 2008. This is reasonable as many firms consider their foremost goal to be providing a quality product to the identified customer base (both included in >50% of missions in 2008). The practice of this "marketing concept" is apparent as companies realize that long term success is dependent upon the satisfaction of customer needs and wants.

The authors next reviewed the mission statements of the 25 largest firms in the U.S. in both 2010 and 2011. The 2010 study included a comparison of the largest corporations in Australia, Canada, and Great Britain (King, D.L., Case C.J. & Premo, K.M. (2010). The authors compared the mission statements of these four English speaking countries in an effort to discover similarities and differences. The most recent study by...

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