The Roles of Mission, Vision, and Values

Mission, Vision, and Values

Mission and vision both relate to an organizations 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 were 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).
A mission statement communicates the organizations 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 firms values. Values are 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
organizations 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).

A vision statement, in contrast, is a future-oriented declaration of the

organizations purpose and aspirations. In many ways, you can say that
the mission statement lays out the organizations 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
organizations mission. Typically, vision statements are relatively brief,
as in the case of Starbucks 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 Toyotas moving forward statement that appears in most
communications to customers, suppliers, and employees (Toyota,
2008). Similarly, Wal-Marts 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 statementsvision statements answer the question
Where is this organization going? Increasingly, organizations also add a
values statement which either reaffirms or states outright the
organizations 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 organizations
strategy. These interdependent, cascading roles, and the relationships
among them, are summarized in the figure.
Figure 4.5 Key Roles of Mission and Vision

First, mission and vision provide a vehicle for communicating an

organizations 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 organizations 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 quothat 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 organizations purpose and

aspirations, and are typically communicated in some form of brief
written statements. A mission statement communicates the
organizations reason for being and how it aspires to serve its key
stakeholders. The vision statement is a narrower, future-oriented
declaration of the organizations purpose and aspirations. Together,
mission and vision guide strategy development, help communicate the
organizations 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 firms 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, 823853.
Bart, C. K., Bontis, N., & Taggar, S. (2001). A model of the impact of mission statements on
firm performance. Management Decision, 39(1), 1935.
Hamel, G., & Prahalad, C. K. (1993, MarchApril). Strategy as stretch and leverage.
Harvard Business Review, 7584.
Ogilvy, Retrieved October 27, 2008, from [Link]

Starbucks, retrieved October 27, 2008, from [Link]

Toyota, retrieved October 27, 2008, from [Link]

Toyota, retrieved October 27, 2008,

from [Link]

Walmart, retrieved October 27, 2008, from [Link]

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