Competition and Globalization, Organizations Need

¶ … competition and globalization, organizations need to develop a strategy, goals and objectives to keep pace, let alone be successful. According to an article by Ireland and Hitt, it is only possible to do this by developing a mission statement that describes the company's fundamental, unique purpose, what it intends to accomplish, and the philosophical premises that will guide its peoples' actions. "Once completed, mission statements become the foundation on which other intended actions are built."

This all-inclusive report by Ireland and Hitt 1) defines and discusses the importance of mission statements, 2) briefly dentifies the market challenges confronting many organizations, 3) note that many companies have yet to develop these statements regardless of the importance, 4) examines factors that inhibit mission statement development, and 5) offer suggestions may increase the development of effective mission statements.

The article, published in 1992, includes 1989 data that 59% of the Chief Executive Officers of Business Week's top 1,000 firms did not have mission statements (David). This was despite the fact that some of these firms had acquired other companies to diversify operations beyond their original core business or product areas. One researcher examined the performance of these types of diversflied firms and concluded that his "data paint a sobering picture of the success ratio of these moves." Ireland and Hitt state that it is possible that lack of an effective mission statement and necessity of restructuring have contributed to the number of divestitures that occurred in some large diversified firms.

Ireland and Hitt conclude their article saying that it is important that the whole company be involved with developing the mission, which has definitely been found to be true. When companies only pay lip service to their mission statement or it is not supported by top down support, it will mean little to the company.

Given the fact that this article was written 15 years ago, I thought it would be of interest to see how much headway has been made regarding mission statements since then. Considering, things have become even more competitive it is even more essential to have a mission.

Although it was difficult to get a true handle on how many companies now develop mission statements, googling brings up scores of sites that promote their importance. However, a large number of sites still discuss the number of companies who develop them incorrectly or do not follow them once they are written. For example, a 2000 survey found that U.S. workers want their work to make a difference, but 75% do not think their company's mission statement has become the way they do business (Workplace 2000 Employee Insight Survey). Unfortunately this often happens because the management team that developed the mission statement have since gone to other companies or the organization, itself, has been acquired and the direction is completely changed. A third reason this happens is because a mission statement is created and some of the managers do not feel part of the process and continue doing business in the same way, rather than the new direction.

Another article written in 2005 says that the way that mission (and vision) statements are written do not mean anything. They are too vague or combine the mission, or where the company sees itself going, with the vision, or how it will get there, into one difficult-to-read piece. The management makes copies of it and pastes it on the walls of the cafeteria and work areas, and it is completely ignored.