4.3: The Roles of Mission, Vision, and Values (2024)

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    • 4.3: The Roles of Mission, Vision, and Values (1)
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    Learning Objectives

    1. Be able to define mission and vision.
    2. See how values are important for mission and vision.
    3. Understand the roles of vision, mission, and values in the P-O-L-C framework.

    Mission, Vision, and Values

    Mission and vision both relate to an organization’s purpose and are typically communicated in some written form. Mission and vision are statements from the organization that answer questions about who we are, what do we value, and where we’re going. A study by the consulting firm Bain and Company reports that 90% of the 500 firms surveyed issue some form of mission and vision statements (Bart & Baetz, 1998). Moreover, firms with clearly communicated, widely understood, and collectively shared mission and vision have been shown to perform better than those without them, with the caveat that they related to effectiveness only when strategy and goals and objectives were aligned with them as well (Bart, et. al., 2001).

    Amission statementcommunicates the organization’s reason for being, and how it aims to serve its key stakeholders. Customers, employees, and investors are the stakeholders most often emphasized, but other stakeholders like government or communities (i.e., in the form of social or environmental impact) can also be discussed. Mission statements are often longer than vision statements. Sometimes mission statements also include a summation of the firm’s values.Valuesare the beliefs of an individual or group, and in this case the organization, in which they are emotionally invested. The Starbucks mission statement describes six guiding principles that, as you can see, also communicate the organization’s values:

    1. Provide a great work environment and treat each other with respect and dignity.
    2. Embrace diversity as an essential component in the way we do business.
    3. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.
    4. Develop enthusiastically satisfied customers all of the time.
    5. Contribute positively to our communities and our environment.
    6. Recognize that profitability is essential to our future success(Starbucks, 2008).

    Similarly, Toyota declares its global corporate principles to be:

    1. Honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world.
    2. Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in the communities.
    3. Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities.
    4. Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide.
    5. Foster a corporate culture that enhances individual creativity and teamwork value, while honoring mutual trust and respect between labor and management.
    6. Pursue growth in harmony with the global community through innovative management.
    7. Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships(Toyota, 2008).

    Avision statement, in contrast, is a future-oriented declaration of the organization’s purpose and aspirations. In many ways, you can say that the mission statement lays out the organization’s “purpose for being,” and the vision statement then says, “based on that purpose, this is what we want to become.” The strategy should flow directly from the vision, since the strategy is intended to achieve the vision and thus satisfy the organization’s mission. Typically, vision statements are relatively brief, as in the case of Starbuck’s vision statement, which reads: “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow (Starbucks, 2008).” Or ad firm Ogilvy & Mather, which states their vision as “an agency defined by its devotion to brands (Ogilvy, 2008).” Sometimes the vision statement is also captured in a short tag line, such as Toyota’s “moving forward” statement that appears in most communications to customers, suppliers, and employees (Toyota, 2008). Similarly, Wal-Mart’s tag-line version of its vision statement is “Save money. Live better (Walmart, 2008).”

    Any casual tour of business or organization Web sites will expose you to the range of forms that mission and vision statements can take. To reiterate, mission statements are longer than vision statements, often because they convey the organizations core values. Mission statements answer the questions of “Who are we?” and “What does our organization value?” Vision statements typically take the form of relatively brief, future-oriented statements—vision statements answer the question “Where is this organization going?” Increasingly, organizations also add avalues statementwhich either reaffirms or states outright the organization’s values that might not be evident in the mission or vision statements.

    Roles Played by Mission and Vision

    Mission and vision statements play three critical roles: (1) communicate the purpose of the organization to stakeholders, (2) inform strategy development, and (3) develop the measurable goals and objectives by which to gauge the success of the organization’s strategy. These interdependent, cascading roles, and the relationships among them, are summarized in the figure.

    4.3: The Roles of Mission, Vision, and Values (2)

    First, mission and vision provide a vehicle for communicating an organization’s purpose and values to all key stakeholders. Stakeholders are those key parties who have some influence over the organization or stake in its future. You will learn more about stakeholders and stakeholder analysis later in this chapter; however, for now, suffice it to say that some key stakeholders are employees, customers, investors, suppliers, and institutions such as governments. Typically, these statements would be widely circulated and discussed often so that their meaning is widely understood, shared, and internalized. The better employees understand an organization’s purpose, through its mission and vision, the better able they will be to understand the strategy and its implementation.

    Second, mission and vision create a target for strategy development. That is, one criterion of a good strategy is how well it helps the firm achieve its mission and vision. To better understand the relationship among mission, vision, and strategy, it is sometimes helpful to visualize them collectively as a funnel. At the broadest part of the funnel, you find the inputs into the mission statement. Toward the narrower part of the funnel, you find the vision statement, which has distilled down the mission in a way that it can guide the development of the strategy. In the narrowest part of the funnel you find the strategy —it is clear and explicit about what the firm will do, and not do, to achieve the vision. Vision statements also provide a bridge between the mission and the strategy. In that sense the best vision statements create a tension and restlessness with regard to the status quo—that is, they should foster a spirit of continuous innovation and improvement. For instance, in the case of Toyota, its “moving forward” vision urges managers to find newer and more environmentally friendly ways of delighting the purchaser of their cars. London Business School professors Gary Hamel and C. K. Prahalad describe this tense relationship between vision and strategy as stretch and ambition. Indeed, in a study of such able competitors as CNN, British Airways, and Sony, they found that these firms displaced competitors with stronger reputations and deeper pockets through their ambition to stretch their organizations in more innovative ways (Hamel & Prahalad, 1993).

    Third, mission and vision provide a high-level guide, and the strategy provides a specific guide, to the goals and objectives showing success or failure of the strategy and satisfaction of the larger set of objectives stated in the mission. In the cases of both Starbucks and Toyota, you would expect to see profitability goals, in addition to metrics on customer and employee satisfaction, and social and environmental responsibility.

    Key Takeaway

    Mission and vision both relate to an organization’s purpose and aspirations, and are typically communicated in some form of brief written statements. A mission statement communicates the organization’s reason for being and how it aspires to serve its key stakeholders. The vision statement is a narrower, future-oriented declaration of the organization’s purpose and aspirations. Together, mission and vision guide strategy development, help communicate the organization’s purpose to stakeholders, and inform the goals and objectives set to determine whether the strategy is on track.

    Exercises

    1. What is a mission statement?
    2. What is a vision statement?
    3. How are values important to the content of mission and vision statements?
    4. Where does the purpose of mission and vision overlap?
    5. How do mission and vision relate to a firm’s strategy?
    6. Why are mission and vision important for organizational goals and objectives?

    References

    Bart, C. K., & Baetz, M. C. (1998). The relationship between mission statements and firm performance: An exploratory study.Journal of Management Studies, 35, 823–853.

    Bart, C. K., Bontis, N., & Taggar, S. (2001). A model of the impact of mission statements on firm performance.Management Decision, 39(1), 19–35.

    Hamel, G., & Prahalad, C. K. (1993, March–April). Strategy as stretch and leverage. Harvard Business Review, 75–84.

    Ogilvy, Retrieved October 27, 2008, fromhttp://www.ogilvy.com/o_mather.

    Starbucks, retrieved October 27, 2008, fromhttp://www.starbucks.com/aboutus

    Toyota, retrieved October 27, 2008, fromhttp://www.toyota.co.jp/en/vision/philosophy.

    Toyota, retrieved October 27, 2008, fromhttp://www.toyota.com/about/our_values/index.html.

    Walmart, retrieved October 27, 2008, fromhttp://www.walmart.com.

    4.3: The Roles of Mission, Vision, and Values (2024)

    FAQs

    4.3: The Roles of Mission, Vision, and Values? ›

    Mission statements answer the questions of “Who are we?” and “What does our organization value?” Vision statements typically take the form of relatively brief, future-oriented statements—vision statements answer the question “Where is this organization going?” Increasingly, organizations also add a values statement ...

    What are the roles of mission, vision and values? ›

    Vision keeps a company focused and paints a picture of success. The company mission is what an organization does to achieve its vision and the master plan for creating value. The mission is how a company puts its purpose and vision into action. Company values define how your company does business.

    What is the role of vision mission and core values in the organizational culture? ›

    The vision, mission, and values statements guide the behaviors of people in the organization. But when the statements are not supported, people have no guidance.

    What important questions does the mission statement answer what questions does the vision statement answer? ›

    Whereas the mission statement answers the question "What do we want to become?," the vision statement answers the question "What is our business?" In order to motivate a workforce effectively, both profit and vision are needed.

    What does the vision mission and values of an organization represent? ›

    The statements should be distinct yet connected – the mission guides the organization daily while the vision highlights the organization's long-term intended path. The values are the principles and beliefs that guide the actions of board members, staff, and volunteers.

    What is an example of a mission, vision and value? ›

    Mission statement: Creating products to minimize human labor, so we can focus more on living and less on working. Vision statement: To reduce the need for human labor and create a more AI-focused labor force in the next five years. Value statement: Scientific study, innovation and cost reduction.

    What is the role of vision of an organization? ›

    A vision statement is important because it provides direction to all actions an organization takes. It is the north star of the firm. All goals are created with the intent to help the company reach its vision. All decisions are guided with the vision in mind.

    What are the roles of vision mission and values in the strategic management process? ›

    Mission and vision statements play three critical roles: (1) communicate the purpose of the organization to stakeholders, (2) inform strategy development, and (3) develop the measurable goals and objectives by which to gauge the success of the organization's strategy.

    How important is a vision mission and values in a company? ›

    Creating a mission, values and vision makes a statement as to how a company and its personnel will interact with the consumer, its colleagues and even competitors. The value, mission and vision statements of a company are the foundation on which all business is conducted and decisions are made.

    Which is most important to your organization, mission, core values, or vision? ›

    Your core values are what keep you on track. Without adhering to a set of values, an organization runs the risk of falling apart. BUT it is the mission that fuels the machine and it is the vision that lays the tracks and points it in the right direction.

    What is the difference between core values and core purposes? ›

    Core Purpose : It is the reason for organization's existence. Core Values : It is the essential and enduring character of organization. a firm sets for itself. organization to society.

    How do you answer vision and mission? ›

    Your mission statement is what your company is doing right now, while your vision statement is what you hope to achieve in the future – where you are in this moment versus where you're going.

    What is the vision mission and values of the organization? ›

    The mission statement communicates the purpose of the organization. The vision statement provides insight into what the company hopes to achieve or become in the future. The values statement reflects the organization's core principles and ethics.

    What is the primary purpose of a mission statement? ›

    A mission statement is a brief statement of the general values and principles which guide the program or office/department goals. It sets a tone and a philosophical position from which to follow a program's or office's/department's goals and objectives.

    What are core values? ›

    Updated August 13, 2024. Core values are personal ethics or ideals that guide you when making decisions, building relationships and solving problems. Identifying the values that are meaningful to you can help you develop and achieve personal and professional goals.

    What is the role of mission, vision and values to HRM? ›

    Mission, vision and values embody who a company is and what it stands for. These foundational attributes are at the heart of the organization — defining its purpose, charting its direction for the future and describing expectations for ethics and behavior. The best statements are unique and concise.

    What is the role of a mission statement? ›

    The goal of a mission statement is to describe, in a sentence or two, what makes your organization distinct and different from its competitors. Essentially, a mission statement should accurately define your organization's guiding principles and unite employees around a common purpose.

    What role does the mission statement play in the planning process? ›

    Ultimately, what a mission statement in a business plan does is integrate a clear, compelling identity that guides the company's future growth and decisions. This clarity is essential for maintaining focus and driving the business towards its long-term goals.

    References

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