The Term "Mission" within the Stategic Management Process

CONTENTS

LIST OF FIGURES

1. Preface: The importance of missions for modern-day companies

2. The position of a firm’s mission within the Strategic Management process
2.1 Mission as first step of the process
2.2 Mission as subsequent part or even outcome of the process

3. The role played by mission
3.1 Basic potential roles of a mission

REFERENCES

LIST OF FIGURES

Fig.1: Mapping strategic planning

Fig.2: The Ashridge Mission Model

Fig.3: HSBC Canada – Mission Statement

1. Preface: The importance of missions for modern-day companies

Influenced by a growing number of acting companies, the world of nowadays business gets more and more integrated and enlaced with an increasing level of both national and global competition. Hence, gaining advantage over main rivals within a certain industry gets more important and makes many managers of modern-day companies thinking about ways to achieve this benefit. Whereas a lot of management members tend to focus on obvious solutions like cost reduction or promotional activities for instance, there are only a few so far who concentrate also on their firm’s mission as primary key to success.

Mission, described as the “fundamental, unique purpose that sets” a certain organisation “apart from other firms of its type and that identifies the scope of its operations in products and in market terms” (Pearce, 1981), can act as an effective tool to achieve success if it is used and structured correctly. According to Campbell, however, managing this important purpose “is still a relatively uncharted area of management” and a lot of managers seem to not understand the “nature and importance of mission while others fail to consider it at all” (Campbell and Yeung, 2002, 284). Even if there are different opinions about the meaning of mission, many authors of management textbooks are of the same opinion that companies should include statements of their raison d’etre, their reason of existence, in the corporate planning process. This process, seen as “an identifiable flow of information through interrelated stages of analysis directed towards the achievement of an objective” (Pearce, 1981) is a dynamic system as companies often face incessant environment changes. Especially since budget-orientated planning mechanisms or forecast-based methods are seen to be insufficient to ascertain long-term survival and prosperity of corporations, it is vital that they conduct efficient strategic planning (Bradford et al., 2004).

Regarding the process and the position of mission within it, you find several authors who advocate the position right at the beginning of Strategic Management whereas there are also theorists who see mission as a subsequent part or even as an output of it. This subject matter will be discussed in the next chapter followed by the topic of the role played by missions within the planning process of organisations.

2. The position of a firm’s mission within the Strategic Management process

2.1 Mission as first step of the process

As mentioned previously, there are a lot of academic and non-academic supporters of the need to identify mission and its statement right at the start of the Strategic Management process, in which managers try to figure out opportunities and potential threats within the organisational environment (Lorange, 1993).

Many authors argue that every company should know why it exists and what it exists for before starting any corporate-orientated planning activities. Therefore every mission should “set out a clear view of the primary purpose of the organisation, its values and distinctive features, and provide a rationale for its strategic plan” (Coates, 1998) which is illustrated in Fig.1. As you can see, the organisational mission is the primary step of the process before the general purpose is broken down into several objectives, which then can be used as basis for the important analysis of the corporate internal and external environment.

illustration not visible in this excerpt

Souce: Coates, 2001, 141

The clear understanding of the corporation’s general purpose is vital because only then the management will be able to set up acquirable goals and objectives (Thompson, 1995) which will lead the company through its life in business. The etymological rooted term mission already suggests something like that as it derived from the Latin word ‘mittere’, which is ‘to send’ in English, meaning to send people on their way to reach certain things or places or giving them at least direction at a certain point of time. Thus, if organisations do not “clarify which values and behaviours are critical for carrying out corporate and competitive strategies, and pursuing the mission” (Thompson, 1997, 184), they are in high danger of losing direction in the future and hence ground to other competitors.

Secondly and in addition to Coates and Thompson, Mintzberg also sees mission as first step of the process arguing that every company founder needs to set up a mission first before allocating resources to achieve the organisational purpose (Mintzberg, 1999) which makes sense as it therefore helps shaping a broad orientation and framework for future decisions. Such basic arrangement and structural design of a firm’s raison d’etre would be helpful and supportive for the management to conduct purpose- based analysis of its environment in the following stages of the process, as the risk of collecting useless data is reduced to a considerable degree.

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