Purpose of a Mission Statement

by Lynne MacDonald; Updated September 26, 2017

A mission statement is a short statement setting out the purpose of an organization, including the product or service it provides, its target market and its unique selling point. Companies use mission statements to inspire employees, guide corporate activities and promote the company. In the 2011 edition of its annual study of management tools and trends, Bain & Co. reported that mission statements are widely used as a management tool and consistently receive above-average satisfaction ratings.

Inspiring Employees

Well-written mission statements inspire employees. Mission statements contain information about the purpose of the company beyond the desire to make a profit. They create a set of common values and behaviors that employees can use to guide their day-to-day work activities. Many companies involve employees in the development of the mission statement to encourage a sense of ownership and engagement in achieving the business's goals. By including the mission statement in the company's recruitment pack, the organization will attract new employees who share its values and ideals.

Improving Performance

Mission statements can improve an organization's financial performance. In a study published in the journal "Management Decision" in 2001, researchers demonstrated that mission statements have a positive effect on organizational performance. However, this positive link was only evident where the content of the mission statement was realistic and aligned to organizational values. The key factor that affected performance improvement was the extent to which the mission statement influenced employee behavior.

Guiding Corporate Decision Making

An organization's mission statement acts as a beacon for decision makers. The actions and direction of the organization must align to the values set out in the mission statement. Where a proposed course of action conflicts with the ethos of the mission statement, it sends a strong signal that the proposed direction does not fit with the goals of the company. By adhering to the core purpose set out in the mission statement, a company can be sure that it is retaining its focus and not diluting its efforts.

Promoting the Company

External stakeholders also have an interest in a company's mission statement. A well-written mission statement is a useful marketing tool. It communicates the values and aspirations of the company, attracting like-minded customers. Nike has a simple but effective mission statement: "To bring inspiration and innovation to every athlete in the world. If you have a body, you are an athlete." It uses this to great effect in its marketing campaigns.

About the Author

Lynne MacDonald has experience in the fields of human resource management, training, organizational development and law. MacDonald received a law degree from the University of Dundee in 1990 and holds diplomas in personnel management and legal practice. She is a Fellow of the Chartered Institute of Personnel & Development.

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