Do Mission Statements Matter for Nonprofit Performance?

• Date: 01 March 2017
• Author: Sanjay K. Pandey,Mirae Kim,Sheela Pandey
• DOI: http://doi.org/10.1002/nml.21257
• Published date: 01 March 2017

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N M  L, vol. 27, no. 3, Spring 2017 © 2017 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/nml.21257

Journal sponsored by the Jack, Joseph and Morton Mandel School of Applied Social Sciences, Case Western Reserve University.

Do Mission Statements Matter

for Nonprofi t Performance?

INSIGHTS FROM A STUDY OF US PERFORMING

ARTS ORGANIZATIONS

Sheela Pandey ,1 Mirae Kim ,2 Sanjay K. Pandey 3

1 Pennsylvania State University Harrisburg

2 University of Missouri

3  e George Washington University

In this exploratory study, we examine whether organizational mission statement attributes

make a difference to the performance of nonprofit performing arts organizations. We use

text analysis to measure two semantic attributes—activity and commonality—of mission

statements. We examine whether these attributes are associated with improved performance

for the instrumental and expressive functions of nonprofit performing arts organizations.

Our findings indicate that the mission statement attribute activity is associated with

improved performance for both instrumental and expressive functions. Our analysis of

nonfindings for the mission statement attribute commonality suggests that there is a need

to develop and use content analysis tools tailored to nonprofit contexts.

Keywords: mission statements , semantic attributes , instrumental-expressive functions ,

nonprofit performing arts , content analysis , nonprofit performance

NONPROFIT ORGANIZATIONS ATTRACT MANAGERS and leaders who are inspired by a

social cause and seek to make a difference. Passion for a cause is crucial; however, passion alone

cannot build and sustain organizations. Long-term success requires knowledge and application

of strategic management tools and techniques (Cochran, David, and Gibson 2008 ). In this

exploratory study, we focused on an important strategic management tool— the mission state-

ment —and examined whether it matters to nonprofit performance.

Drucker ( 1974 ), an influential business strategy thinker, underscored the central role of

mission statements in driving organizational strategy and performance. Although nonprofit

strategic management scholars acknowledge the salience of a mission statement (for example,

Anheier 2005 ; Phills 2005 ), not all nonprofit leaders recognize its strategic value. As a result,

attitudes toward mission statements vary. Whereas some consider mission statements to be

Correspondence to: Sheela Pandey, Pennsylvania State University Harrisburg, School of Business Administration, 777

West Harrisburg Pike, Middletown, PA 17057. E-mail: spandeywrk@gmail.com.

Nonprofi t Management & Leadership DOI: 10.1002/nml

390 PANDEY, KIM, PANDEY

perfunctory, others believe that these “statements of purpose” are central drivers of organiza-

tional strategies (Bart 1997 ; Kirk and Nolan 2010 ; Swales and Rogers 1995 ). Mission state-

ments also represent the organization in its artifacts, for example, newsletters, annual reports,

brochures, posters, and business cards (Fairhurst, Jordan, and Neuwirth 1997 ), and can

influence stakeholder perceptions of the organization and its activities.

Over the past six decades, guidelines for developing mission statements have evolved from

a narrow focus on strategic components (for example, Pearce and David 1987 ) to a broader

approach emphasizing effective communication (Cochran et al. 2008 ). Effective communica-

tion—both denotative (readability and literal meanings) and connotative (subjective meanings

and emotional aspects)—ensures that mission statements generate “feelings that a particular

organization is successful… . A good mission statement does more than simply include the

needed components; it is also inspiring and motivating” (Cochran et al. 2008 , 33).

Our study examines the relationship between connotative attributes of mission statements

and performance of nonprofit arts and culture organizations by focusing on two semantic

attributes, activity and commonality. We chose these two attributes because of their relevance

to major trends in the nonprofit performing arts sector. We applied semantic analysis to mis-

sion statements (Goddard 2011 ), using a content analysis tool that measures semantic attri-

butes (Hart 2001 ). After presenting our analytic results, we conclude with a discussion of key

findings, implications, and future research directions.

Literature Review

Our study is grounded in research on mission statements and linguistic theory. We provide a

brief review of each of these research streams before proceeding with hypotheses development.

Research on Mission Statements

Despite the importance of mission statements as a strategic management tool, this critical orga-

nizational communiqué in the nonprofit context has been examined in only a limited number

of studies (for example, Brown, Yoshioka, and Munoz 2004 ; Kirk and Nolan 2010 ). Extant

literature from other sectors has concluded that mission statements are tools for exercising

leadership (Klemm, Sanderson, and Luffman 1991 ), clarifying organizational goals (Bart 1998 ;

Pearce and David 1987 ), establishing effective public relations (Bart 1998 ; David 2007 ), and

generating interest in the organizational purpose (Bartkus, Glassman, and McAfee 2000 ). To

examine corporate mission statements, researchers have used two distinct analytical approaches:

(1) analysis of strategic components (for example, Campbell and Yeung 1991 ; Pearce and David

1987 ), and (2) analysis of linguistic attributes (for example, Swales and Rogers 1995 ).

In the strategic component approach, scholars have adopted an instrumental perspective.

Pearce and David ( 1987 ) argued that mission statements, the most visible part of a firm ’ s

strategic plan, need to address eight key organizational concerns: target customers and mar-

kets; principal products and services; geographic domain; core technologies; commitment

to survival, growth, and profitability; philosophy; self-concept; and desired public image.

Campbell and Yeung ( 1991 ) identify four components of effective corporate mission state-

ments: purpose, strategy, behavioral standards, and values. Their instrumental perspective has

been widely adapted in follow-up studies of mission statements (for example, Bart and Baetz

1998 ; Bart, Bontis, and Taggar 2001 ).