Every business organization is established for some intended purpose. For a typical business firm, the fundamental purpose is usually expressed in the mission statement. The mission is a general statement of the markets that the firm plans to serve which includes some indication of how the firm intends to position itself. A mission statement can also describe opportunities that the firm’s management perceives as being available in the market and detail how resources will be deployed to reach specific goals. The process of developing a mission statement is not as simple as it may seem. A mission statement too narrowly defined may result in management overlooking many exiting opportunities upon which the enterprise could capitalize. On the other hand, a mission statement too broadly defined could fail to provide clear direction to the employees and managers who must seek to reach specific goals.
Most business organizations begin operations with a clear and focused mission. However, over time, due to operational problems, continued growth, and unexpected opportunities, the original mission may lose its clarity and fail to reflect what a firm is really all about. Thus, management must continuously evaluate opportunities in terms of resources and capabilities, and ask itself such vital questions as: What really is our purpose? Who are our customers? What values do we provide to our customers? What should our business be in the future? The answers to these questions should lead to continuous revision and reconfirmation of the mission statement. Management also has a responsibility to both incorporate ideas into the mission statement and communicate any revisions to all personnel the organization. The mission statement provides personnel with a sense of responsibility, a sense of direction, and a greater understanding of their role in the firms.
Consider the following example of a mission statement elaborated by Sears Management in the mid 1970s:
Sears is a family store for middle class, home owning America. We are the premiere distributor of durable gods for these families, their homes and their automobiles. We are the premiere distributor of non-durable goods that have their acceptance base in function rather than fashion. We are valued by middle class America for our integrity, our reputation for fair dealing and our guarantee. We are not fashion store. We are not a store for the whimsical or the affluent. We are not a discounter or an avant-guarde department store. We are not, by the standards of the trade press or any other group of bored observers, an exciting store. We are not a store that anticipates. We reflect the world of middle America and all of its desire and concerns and problems and faults and we must all look on what we are and pronounce it good, and seek to extend it, and not be swayed from it by the attraction of other markets no matter how enticing they might be.
While recent mission statement has resulted in a significant reorientation of Sears basic mission, it is clear that the target market of the 1970s consisted of middle class, home owning Americans. It was also clearly defined how Sears planned to service this market segment with goods and services that were based in function than in fashion. The mission statement also specified management’s perception of Sears major strengths: integrity, reputation, and guarantee. It provides a sense of direction by clearly defining the merchandise assortment to be sold. However, in the 1980s Sears seemed to lose sight of that mission and move into fashion merchandise, new product lines, and soft goods. The resulting impact on the firm was deterioration in profitability, the loss of clear direction, and finally a need to refocus.