Mission Statement discussion question STR/581

Anonymous
timer Asked: Jul 5th, 2014
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Question Description

  • How do companies formulate their mission statement? Why is the mission statement important in guiding an organization's strategy? 125-150 words

Tutor Answer

Ather A
School: University of Virginia

A mission statement is a key tool that can be as important as your business plan. It captures, in a few succinct sentences, the essence of your business's goals and the philosophies underlying them. Equally important, the mission statement signals what your business is all about to your customers, employees, suppliers and the community.

The mission statement reflects every facet of your business: the range and nature of the products you offer, pricing, quality, service, marketplace position, growth potential, use of technology, and your relationships with your customers, employees, suppliers, competitors and the community.

"Mission statement help clarify what business you are in, your goals and your objectives,"

Mission Statement Purpose

A company's mission statement is essentially its statement of purpose. It serves as a guide for all of the company's decision-making. Shareholders, leaders and employees are generally the target of the mission. It should help workers within the organization know what decisions and tasks best align with the mission of the company. A mission statement offers insight into what company leaders view as the primary purpose for being in business. Some companies have profit-motivated missions, while others make customers a focal point. Other firms use a mission to point out more altruistic intentions that ultimately lead to profits.


Role of Mission Statement in Strategic Planning



The development of strategic planning begins with an agreement on a definition or purpose for the business or organization. It basically answers the question, What business are we in? This question will dictate the type of products or services the business will offer  as defined by the needs and wants of the specific market.

This agreement on a definition or purpose for the business or organization is commonly termed as the Mission Statement. This Mission Statement can be thought of as a kind of constitution or charter that is established by any business or organization when it comes into existence. But unlike constitutions or charters, the Mission Statement does not directly answer the question, What business are we in?

Instead of answering by categorically asserting, We sell air-conditioners (this is for purposes of illustration only), the Mission Statement states it in this manner We provide you with a comfortable climate. The Mission Statement first of all states the benefit of the product that is mentioned.



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