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An increasing number of profit and nonprofit organizations across America are incorporating strategic management activities into their overall operations. Strategic management can be defined as the formulation, implementation, and evaluation of actions that will enable a firm to achieve its objectives. The strategic management process is based on the belief that a firm should continually monitor key internal and external events and trends; firms should seek to pursue strategies that capitalize on internal strengths, take advantage of external opportunities, improve internal weaknesses, and minimize the effect of external threats. It is widely acknowledged today that the rate, magnitude, and complexity of changes that impact organizations are accelerating. These changes are creating a different type of consumer, different types of products and services, and consequently a need for different strategies. Increased competitiveness worldwide, coupled with rapid social, technological, and economic changes, are major reasons why the strategic management process is being adopted by more and more firms.
In a recent review of strategic management models, the mission statement was noted as being an essential first step in the strategic management process (David, 1984; Staples & Black, 1984). A mission statement can be defined as an enduring document of purpose that distinguishes one business from other firms of its type (Pearce, 1982). A mission statement is a declaration of an organization's business or "reason for being." A clear statement of a company's mission is essential to effectively establishing objectives, formulating strategies, setting goals, devising policies, allocating resources, and motivating employees. A mission statement is thus an integral component of the strategic management process. As evidenced in the following quotation from Peter Drucker's classic book entitled Management: Tasks, Responsibilities, and Practices, a good mission statement makes strategy formulation, strategy implementation, and strategy evaluation much easier.
The importance of a mission statement to effective strategic management is well supported in the management literature (Staples & Black, 1984). A mission statement may be the most visible and public part of a strategic plan. As such, steps should be taken to insure that the statement includes all of the essential components and attributes. In addition, a company mission should be evaluated to insure that it communicates clearly the desired feelings that will guide and motivate employees to action.
The purpose of this article is to present a practical framework for developing an effective mission statement. A developmental model is presented and exemplified through application to actual organizations. The proposed mission statement developmental framework is presented in Figure 1, and includes the following four stages: Orientation, Component Analysis, Communication Analysis, and Applicability Analysis.
A strategic planning task force is an appropriate group to do the initial development of an organization's mission statement. However, if this group is too large, a sub-committee could be developed called a "mission statement committee" and charged with going through the suggested stages presented in this paper.
Orientation Process
The purpose of orientation is to insure that individuals in the strategic planning task force understand the strategic management process. This orientation training should raise the level of awareness about particular individual's significance and role in planning. A training session would include the following: an overview of the strategic management process, a review of the significance of the mission statement to strategic management, and an introduction into the development process used to design an effective mission statement for their organization.
The process of developing a mission statement involves rendering differences of opinion. This is a vital part of achieving an appropriate mission statement for a firm. The task force must become aware that the process the organization goes through in coming to consensus in the development of the mission statement is as important as the output of the process--the mission statement itself.
Component Analysis
Given the understanding of what a mission statement is, the components of such a statement are important. The strategic planning task force must identify the major components to be included in their mission statement. Pearce (1982) recently identified 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. These components could be used as a guideline by the committee. According to Pearce, a well conceived mission statement answers the following questions about an organization:
1. Customers Who are the enterprise's present and future customers?
2. Products or services--What are the firm's major products or services?
3. Markets--Where does the firm compete?
4. Technology--What is the firm's basic technology?
5. Concern for survival, growth, and profitability What is the firm's attitude towards economic goals?
6. Philosophy--What are the basic beliefs, values, aspirations, and philosophical priorities of the firm?
7. Self-concepts--What are the firms' major strengths and competitive advantages?
8. Concern for public image--What is the firm's public image?
An actual example for each component is included in Table 1. The mission statement Committee would write a draft Mission Statement from their derived components. Actual company examples of each component is included in Table 1. The Mission Statement committee would use these components as a guide in developing their initial Mission Statement draft. Various idea generation techniques * such as Nominal Grouping or Brainstorming could be used to identify other important components for inclusion in this initial draft.
Communication Analysis
Even though the mission statement includes the necessary components, its communication effectiveness may be poor. Recent writings involving "corporate culture" and successful companies have emphasized the significance of effective communications between the organizations many constituents. (Peters & Waterman, 1982; Kennedy, 1984)
Kennedy reports:
Since written communication involves denotative as well as connotative meanings both are suggested as part of the community analysis for mission statement development. (Bradley & Baird, 1983)
Denotative Analysis
This aspect or stage is defined as determining the readability of the mission statement e.g., is it written in a clear and concise manner? A classic readability index called the Fog Index is an appropriate technique to measure readability (Blundell, 1980). Table 2 illustrates how the Fog Index computed. The mission statement committee would evaluate their drafted Mission Statement to determine its readability index. If the index was considered too high for their average readership they would rewrite the MS draft by reducing sentence length and usage of multiple syllabled words.
Connotative Analysis
In their book entitled Communication for Business and Professions, Bradley and Baird reveal that the connotative meanings and emotional aspects of a written document are important. Relating this to development of a good mission statement, a Mission Statement should arouse one's feelings and emotions for an organization. That is, an effective mission statement results in feelings that a particular organization is successful, knows where it is going, and is worthy of the reader's time, support, and investment. A good mission statement does more than simply include the needed components; it is also inspiring and motivating. Quinn (1980) states that such a statement should create elan or create an identity larger than the limits placed upon the firm by the individuals themselves. Zaleznik (1970) has found that effective organizational "missions" help satisfy people's needs to produce something worthwhile, to gain recognition, help others, to beat opponents or earn respect. Furthermore, according to Quinn, the firms must distinguish themselves from all others in the competitive environment. So far, at least, the mission statement must transcend the criteria usually attributed to objectives such as measurable, achievable, etc. in that it should lift the firm above its present state. Keller (1983) reminds managers that what is important is the quality, daring and sagacity of the strategy.
This connotative step for the Mission Statement committee involves asking managers to evaluate the mission statement using words that describe the feelings management wanted to be communicated. The feelings/impressions that should be present are only briefly discussed in the literature. Glueck (1980) mentions such things as coherence, agreed upon, top down, etc., while Quinn (1980) includes elan in the description.
Other concepts/words may be more representative for a particular organization and may be developed by the management team: however, the following terms are offered as suggested words to use when measuring the "felling" that others perceive to be inherent in the mission statement, the connotative meanings.
Optimism--the impression that while the goals are large they can be achieved
Certainty--impressions of resoluteness, completeness, commitment
Aggressiveness--impressions of assertiveness or competitiveness
Inspiration--impression of vision, far reaching nature
Concreteness--references to recognition of environmental influences, explicitness, and clarity
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