The core of retail mission statements: top 100 U.S. retailers.

Author:Anitsal, M. Meral
 
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INTRODUCTION

Retailers use mission statements to build long-term relationships with their customers, employees, and the community. Prior research demonstrates that the content of a mission statement has significant implications on the firm's performance (Alavi and Karami, 2009; Green and Medlin, 2003; Bart, 1998). The mission statement is a broad description of a firm's goals and objectives and the scope of activities it plans to undertake to achieve its goals (Campbell, 1997). It informs various shareholders what type of business the firm is in, its purpose, and how the firm builds a sustainable competitive advantage. Thus, firms and organizations typically use mission statements to communicate their purpose and goals to employees and stakeholders to simultaneously create an organizational culture and corporate identity (Peyrefitte and David, 2006). A firm's purpose stated in its mission statement distinguishes its business from its competitors, identifies its scope of operations, embodies its business philosophy, and reflects the image it seeks to project (Toftoy and Chatterjee, 2004).

Pearce (1982) identifies eight key components of mission statements: customers, products or services, markets, technology, concern for survival, growth, and profitability, philosophy, self-concept, and concern for public image. Wheelen and Hunger (2000) develop nine criteria to measure the completeness and quality of a mission statement: 1) purpose; 2) products and/or services; 3) competitive advantage; 4) scope of operations; 5) philosophy; 6) vision; 7) sense of shared expectations; 8) public image, and 9) emphasis on technology, creativity, and innovation.

Green and Medlin (2003) investigate the link between the completeness and quality of organizations' mission statements and their financial performance and find a significant positive relationship. They conclude that strategic managers can expect to improve the organization's financial performance by improving the organization's mission statement. With the purpose of providing guidance to strategic managers, this study content analyzes the mission statements of the top 100 retailers using the 7Ps of the services mix theory (i.e., product/service, price, place/distribution, promotion, people, physical evidence, and process including corporate responsibility). Additionally, the study further organizes the people element of the mission statement contents into employees, customers, stakeholders/investors, and community. Next, the literature on mission statements and 7Ps of marketing mix will be reviewed, the methodology of this study will be explained, and the data content analysis and major findings of the study are discussed. Finally, the paper draws conclusions, leading to propositions to guide further avenues for future research.

LITERATURE

The findings of research studies that examine the relationship between the mission statements and organizational performance are conflicting in the literature (O'Gorman and Doran, 1999). Bart and Baetz (1998) find no significant empirical evidence to support the relationship; though, they point out that some of the aspects of a mission statement may be related to higher levels of performance. However, Green and Medlin (2003) conclude that completeness and quality of a mission statement is linked to financial performance. Alavi and Karami (2009) find positive significant relationship between firms' mission statements and their financial performance in the small and mid-sized enterprise sectors. They further confirm that the presence of financial goals in mission statements is negatively associated with firm's performance. Alavi and Karami (2009) conclude that increasing the involvement of firm's non-managerial employees in the development of the mission statement increases financial performance.

The CNNfn.com Evaluator Summary provides eleven criteria to determine organizational performance: 1) revenue; 2) net income; 3) cash flow; 4) return on equity; 5) return on assets; 6) return on invested capital; 7) total debt to equity; 8) long-term debt to equity; 9) price/earnings ratio; 10) price/sales ratio, and 11) price/earnings/growth ratio (Green and Medlin, 2003). Because this study examines the mission statements of the top 100 U.S. retailers that were ranked based on their financial performance, it does not focus on examining the relationship between the content of their mission statements and financial performance. Instead, the main purpose of this study is to examine the mission statements of the top 100 U.S. retailers based on the 7Ps of services marketing mix framework and elaborate on which essential components are used by retailers and implications on their organizational performance. Specifically, it analyzes the information that retailers use in their mission statements to communicate with various stakeholders.

In a similar study, Peyrefitte and David (2006) analyze the mission statements of large U.S. firms across four industries (banking, computer hardware, computer software, and food processing) based on nine components (customers, products and services, markets, technology, survival/growth/profitability, philosophy, self-concept, public image, and employees). They find that the use of the components of the mission statements of these firms from four different industries were comparable responding to stakeholders in similar ways. The authors of this study propose that the mission statements of the top 100 U.S. retailers will differ in the inclusion of all of the 7Ps of the services mix in their mission statements. The next section will elaborate on the 7Ps of the services mix theory and how firms apply the 7Ps to their mission statements.

Application of the 7Ps of Services Mix Theory to Mission Statements

To the authors' best knowledge, this paper is the first study that discusses how each of the 7Ps of the services mix relates to mission statements in the literature. The 7Ps concepts (participants, physical evidence, process, price, place, promotion, and product/service), derived from the 4Ps of marketing mix theory, were originated by Shostack (1977a) and developed and defined by Booms and Bitner (1981).

Participants are the employees/personnel/associates, who deliver service, and also other customers, who participate in the service environment. The personnel-to-customer and customer-to-customer interactions are crucial to make the service experience pleasant and satisfactory (Anitsal, Girard andAnitsal, 2011). Thus, including the participants in mission statements can initiate a long-term relationship between the participants and the firm. In addition, including the participants (e.g., JC Penney's mission statement) in the mission statement demonstrates that the company cares for these stakeholders, which include resource providers such as customers and employees and the non-resource providers such as the community, and the environment (van Nimwegen, Bollen, Hassink, and Thijssens, 2008). van Nimwegen et al. (2008, p.77) conclude that "a failure to recognize and include essential stakeholders in the mission statement may be costly in the long run, particularly when competitors are better able to address these stakeholders".

Physical evidence is the environment in which the firm and customers interact and in which services or products are delivered; it can also be any tangible commodities which facilitate performance or communication of the service (Shostack 1977a; Booms and Bitner, 1981). In this respect, physical evidence can be considered as the presence of the company on the web, global markets, or locating at preferred shopping destinations (e.g., Target).

Process for service assembly is the actual procedures, mechanisms, and flow of activities by which the service is delivered (Booms and Bitner, 1981). Companies improve their processes using technology (e.g., Macy's), establishing guidelines, and working responsibly (e.g., Delhaize America). Including these components in mission statements could enhance not only operation efficiency but also customer perceptions of service quality and of how much the retailer cares about satisfying its customers.

While the tangible Product covers a wide range of variables such as brand name, quality of inputs, features, and options, the intangible nature of services results in simultaneous...

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