MISSION AND OBJECTIVES
What are mission and objectives and how we can define them?
(Translated by Google Translate)
Every process of strategic management starts from defining the mission and major goals that the company intends to achieve.
The mission is very broad policy statement of the goals that the company pursues and generally identifies major areas of activity in the economic and social development.
According to Ackoff mission:
- contain a statement of objectives through which the mission itself can be reached
- makes the company different from competitors
- defines the business in which the company intends to operate
- incorporates not only the shareholders and management'sexpectations but also the stakeholders'
- stimulates, represents a challenge
In reality, the mission has different way to speak us and not all companies have made it explicit in writing.
For the most part it is formulated in the broadest sense and, in this case, does little to guide management in the short term and has no practical meaning.
The reason of that is that it often consists of a generic phrases like "stay ... remain among the leaders in the field of technology, reliability, quality and value ..."," to become the best company in the filed of consumer goods in the world, generating the highest profitability for shareholders ...", etc..
If, however, it is formulated in a precise and limited way, the mission defines what business the organization intends to operate, what are its aims and values which inspire its strategies.
And it is the starting point of strategic management, providing a framework to formulate strategies.
For example, if the firm decides to leave the borders, mission must take an international character and indicate what role the international markets have in enterprise development in the profitability of the strategies of foreign expansion and acquisition human and financial resources.
A survey conducted among the top Fortune 500 companies in the late eighties revealed that 60% of them had formally defined the mission. A similar research in Britain even increase the proportion to 80%.
As for content, the Ashridge Strategic Management Center surveyed 200 companies in various countries and the conclusion was the extreme variety of formulations of missions, with some confusion about the meaning of the term.
Some companies see the mission as a strategic tool, others as a kind of intellectual discipline.
The mission always says general principles that indicate the positions in the long term on which the firm aims with their strategies.
These principles should be sufficiently flexible to enable the company to respond to any changes in environmental conditions and yet indicate a path to their strategies.
Various researches have come to a conclusion, namely that the mission is clear from the definition of 4 elements:
- main objectives that the company intends to achieve
- business in which the company intends to compete
- policies and values
- rules of conduct in decisions involving social responsibility