A mission statement analysis comparing the United States and three other English speaking countries.

Author:King, Darwin L.
Position:Company overview


Now, more than ever, 21st century business enterprises realize the importance of a clear, succinct mission statement to support successful operations. Mission statements serve to communicate vital information to all stakeholders interested in a business organization. Mission statements are normally fairly short with very few that exceed one or two paragraphs. These vital business communication tools must accomplish a number of goals including stating the firm's purpose, unique qualities, values, and basic goals/objectives.

Peter Drucker stated that firms need to develop a mission statement that answers the questions "What is our business?" and "What do we want to become?" in order to effectively manage current and future operations (Drucker, 1974). Effective long range strategic planning requires an accurate answer to these questions by the firms' management. Unless the basic concepts upon which a business has been built are visible, clearly understood, and explicitly expressed, the business enterprise is at the mercy of events (Drucker, 1974).

Thus, the mission statement acts as a guide; top managers must think through and articulate the nature of the business so that employees throughout the organization, and in conjunction with the organization's other stakeholders, act with direction and unison in pursuing decisions that provide direction toward compatible goals. The largest business organizations must be especially dedicated to publishing accurate mission and vision statements because they will be analyzed by millions of various stakeholders.

Drucker points out that the firm's business purpose and business mission are rarely given adequate thought and consideration. He feels that this omission is perhaps the most important single cause of business frustration and business failure (Drucker, 1974). The rush to splice words together to arrive at a "so-called" mission statement may be problematic for some firms but this may indeed be changing. Today, many American businesses have reached the point where mission statements no longer stand as hollow, decorative statements of purpose.

Fred David argues that a mission statement is a declaration of an organization's "reason for being" (David, 2009). David also argues that a complete mission statement must provide a wealth of information for the wide variety of stakeholders. He feels that an effective and efficient mission statement must define an organization's target market customer group(s), its products or services produced, the markets served, technology employed, and the firm's concern for survival, growth, employees, profitability, and the environment (David, 2009).

David believes that these factors should be utilized to create and evaluate mission statements. Using this process, he feels that the firm will be proactive in the creation of an effective mission statement. A number of authors, including David, believe that many organizations use a reactive (rather than proactive) approach in the development of a mission statement. The reactive method describes firms that create mission and vision statements only after the firms have experienced financial difficulties (David, 2009). He feels that the development of mission and vision statements in time of crisis is representative of irresponsible management behavior. David also states that any organization that fails to develop a comprehensive and inspiring mission statement loses the opportunity to present itself favorably to existing and potential stakeholders including shareholders, creditors, vendors, and employees (David, 2009).

Research conducted by Verma found that significant numbers of stakeholders are now aware of and understand their mission statement. (Verma, 2010). To truly approach the importance of the final product (mission statement), top management must use judgment and serious reflection in creating a statement that appropriately identifies critical stakeholders, goals, and objectives. Verma pointed out that mission statements assume importance in creating conditions for laying the structural mechanism whereby deviations (to the mission statement) are automatically detected and corrected (Verma, 2010).

One common misconception concerning mission statements is that a carefully constructed statement, once prepared, will fulfill the firm's needs and be the guiding light spanning the entire life of the organization. Because the current business environment is especially dynamic, Drucker estimates that mission statements may be good for only ten years when a revision would typically be appropriate (Drucker, 1974). Other writers caution that managers must be careful to regularly modify the mission statement to reflect changes in the business environment. Once an organization has a time sensitive and effective mission statement in place, top management can use this as a guide in making influential decisions across the organization.


This paper continues the mission statement research that was begun by the authors nearly ten years ago. The authors have previously published two mission statement articles in the Academy of Managerial Communications Journal (King, 2001) and the Academy of Strategic Management Journal (King, Case & Premo, forthcoming, 2010). The 2001 study reviewed the top Fortune 100 firms in the United States. Table 1 summarizes the content analysis of those statements from two perspectives. First, the stakeholders named in the missions and secondly the identified goals or objectives of the firm. Stakeholders recognized in the 2001 mission statements included customers, stockholders, employees, competitors, suppliers, and governments. Identified goals and objectives included quality products or services, core values, leadership, global emphasis, technology, environmental concerns, profits, and ethical behavior.

As the table shows, customers and stockholders were the most commonly mentioned stakeholders (61% and 34% respectively). Employees were a distant third being mentioned in only 21% of the 2001 mission statements. The goals or objectives mentioned most often were quality, core values, and leadership. Combining these factors, firms were striving to communicate the fact that they were producing a quality product for their customers. Note that in 2001 mission statements, the goal of maintaining ethical behavior was mentioned in only three of the statements. This was prior to the discovery of many accounting frauds and the passage of the Sarbanes-Oxley Act on July 30, 2002.

The authors' mission statement analysis continued in 2008 with a review of the Fortune top 50 companies. Table 2 presents a summary of this analysis of stakeholders and goals or objectives.

Customers and employees were the most commonly mentioned stakeholders in these statements, while product quality and the maintenance of global operations were the most typically included goal or objective. A surprising decrease occurred in the number of mission statements that described the firm as one that utilized current technology decreasing from 14% to 2% of the statements. In addition, none of the 2008 mission statements specifically mentioned competitors which did occur in 9% of the 2001 missions. Table 3 below is converted to percentages to allow for better comparison of the results of the previous two tables which are based on the actual number of mission statements involved.

This table points out some interesting trends that occurred over this eight year period. First, the term "communities" has become a popular stakeholder mentioned in many of the 2008 statements. In 2001, only 6% of the mission statements used this term and only eight years later 30% included the concept of communities. Communities, for Valero Energy, means that the company takes a leadership role in the communities in which its people live and work by providing company support and encourage employee involvement. Another significant trend was the increase in the importance of ethics and the maintenance of ethical behavior. In 2001, only 3% of the mission statements included ethics as a goal or objective. With the passage of the Sarbanes-Oxley Act in 2002, large organizations realized that they must maintain a high standard of ethical behavior as a foremost goal. Therefore, it is not surprising that 30% of the firms included ethical behavior in their 2008 mission statement.

Another significant trend that occurred during this eight year period was the increased appreciation for employees. The number of mission statements that specifically identified employees as an important stakeholder increased from 21% in 2001 to 34% in 2008. This is not surprising as organizations realize that their most valuable asset is their employees (human resources). A bit of a surprise was the decreased emphasis on the owners of the corporation. Stockholders were included in fewer mission statements in 2008 than 2001 (decreasing from 34% to 28%).

Another change that occurred during this period is the reduced use of the term "core values" dropping from 25% to 14% of the statements. In 2001, many firms did not have a formal mission statement but instead listed a number of central or core values to which they strived. In 2008, an increased number of firms was producing a more standard format for the mission statement and listing these values within that declaration.

Another major trend over this period was the emphasis by the firm on producing a product or service of the highest quality and best value for its customers. The goal of providing a high quality/best value product was included in 52% of the mission statements in 2008 compared to only 25% in 2001. Reviewing table 3 shows that the goal and stakeholder mentioned most often in the 2008 statements was providing a high quality product or service for the customers of the firm. This is really no surprise as the "marketing concept" has historically stated that a...

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