The Relationship between Mission Statement and Firms’ Performance

Salehi-Kordabadi, Sajjad; Karimi, Sajjad; Qorbani-Azar, Mohammad

doi:10.33945/SAMI/IJASHSS.2020.1.2

Document Type : Original Article

Authors

¹ Department of Public Management, Faculty of Management and Economics, , Islamic Azad University Science and Research Branch, Tehran, Iran

² Department of Management, Faculty of Management and Economics, Islamic Azad University, Dehaghan, Iran

³ Department of Management, Faculty of Management and Accounting, Islamic Azad University, Rasht, Iran

https://doi.org/10.33945/SAMI/IJASHSS.2020.1.2

Abstract

After two decades of research, the clear relationship between a mission statement and a firm’s performance is not found yet. Past research has demonstrated the meaningful relationship between the mission statement and the performance. Some of these studies, however, have indicated there is no meaningful relationship between the mission statement and the performance. The aim of this paper is to identify the relationship between the mission statement components and the performance components. Moreover, it tries to help managers to state high quality of the mission statement in their firms. Six-component mission statement was developed to measure the completeness of firm’s mission statement, and the BSC was used so as to measure the firms’ performance. The BSC includes four dimensions: financial, customer, internal process and learning and growth. In this research, field research technique was applied, and questionnaires were used in order to gather data. The statistical population was 35 firms. Totally, 1400 questionnaires were passed out, 40 questionnaires in each firm, out of which 1230 questionnaires were returned. SPSS 18 was utilized to analyze the data. Results indicated a significant positive relationship between the components of the mission statement and some of the performance components. The most significant positive relationship was found between the purpose and the financial component, and the least significant positive relationship was found between the vision and the internal presses. In addition, the financial dimension was related to the all the mission components. As a result, improving firm mission statement will improve financial performance, and strategic managers should devote extreme attention to this issue.

Keywords

References

Agostino, D, Arnaboldi, M. (2011). How the BSC implementation process shapes its outcome, International Journal of Productivity and Performance Management, 60(2): 99–114.

Alavi, M.T, Karami, A. (2009). Managers of small and medium enterprises: mission statement and enhanced organisational performance, Journal of Management Development, 28(6): 555–562.

Alison, K, Kaye, J. (2005). Strategic planning for nonprofit organization, New Jersi: John Wiley & Sons.

Allen, R. S, Helms, M. M. (2002). Employee perceptions of the relationship between strategy, rewards and organizational performance, Journal of Business Strategies, 19(2): 115-139.

Analoui, F, Karami, A. (2002). CEOs and development of the meaningful mission statement, Corporate Governance, 2(3): 13-20.

Barnes, J. L. (1987). An international study of curricular organizers for the study of technology, unpublished doctoral dissertation, Virginia Polytechnic Institute and State University: Blacksburg, Virginia.

Bart, C.K. (1998). A comparison of mission statement and their rationales in innovative and non-innovative firms, International Journal of Technology Management, 16(1): 64-77.

Bart, C.K, Baetz, M. (1998). The relationship between mission statements and firm performance: An exploratory study, Journal of Management Studies, 35: 823-826.

Bart, C.K, Hupfer, M. (2004). Mission statements in Canadian hospitals, Journal of Health Organization and Management, 18(2): 92-110.

Bart, C.K, Tabone, J. (1998). Mission statement content and hospital performance in the Canadian not-for-profit health care sector, Health Care Manager, 24(3): 108-116.

Bryson, J. M, Alston, F.K. (2005). Creating and implementing your strategic plan, San Francisco: Jossy-bass.

Campbell, D, Shrives, P, Bohmbach, H. (2001). Voluntary disclosure of mission statements in corporate annual reports: signaling what and to whom?, Business and Society Review, 106(1): 89-115.

Collins, J.C, Porras, J.I. (1997). Built to Last: Successful Habits of Visionary Companies, New York: Harper-Collins.

Crossan, M, Bedrow, I. (2003). Organizational learning and strategic renewal, Strategic Management Journal, 24: 1087-1105.

Darbi, W.P.K. (2012). How do high-performing organizations define their mission in Ghana?, African Journal of Economic and Management Studies, 3(2): 184–204.

Desmidt, S, Prinzie, A, Decramer, A. (2011). Looking for the value of mission statements: a meta-analysis of 20 years of research, Management Decision, 49(3): 468–483.

Drohan, W. (1999). Writing a mission statement, Association Management, 51: 117-126.

Egormen, C, Doran, R. (1999). Mission statements in small and medium sized businesses, Small Business Management, 37(4): 59-66.

Haghighy, M, Gharleghi, E, Mirasadi, S, Nikbakht, F. (2010). A survey of relationship between the characteristics of mission statement and organizational performance, A study of Change Management, 4: 36-47.

Hahn, W, Powers, T. (1999). The impact of strategic planning sophistication and implementation on firm performance, The Journal of Business and Economic Studies, 5(2):. 19-35.

Kaplan, R.S, Norton, D.P. (2001). The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, Boston: Harvard Business School Press.

Green, K. W, Medlin, B. (2003). The strategic planning process: the link between mission statement and organizational performance, Academy of strategic management journal, 2: 23-31.

Klemm, M, Sanderson, S, Luffman, G. (1991). Mission statement: Selling corporate values to employees, Long Range Planning, 24( 3): 73-79.

Niven, R. (2008). Balanced scorecared step-by-step for government and nonprofit agencies, New Jersi:John Wiley & Sons.

Pearce, J. (1982). The company mission as a strategic tool, Sloan Management Review, 23(3): 15-24.

Toftoy, C, Chatterjee, J. (2004). Mission statements and the small business, Business Strategy Review, 15(3): 41-44.

Wheelen, T.L, J.D, Hunger. (2000). Strategic Management, Upper Saddle River, New Jersey: Prentice-Hall.

Wilson, I. (1992). Realizing the power of strategic vision, Long Range Planning, 25(5), 18-28.

Wing, B. W, Guo, L, Li, W, Yang, D. (2007). Reducing conflict inbalanced scorecard evaluations, Organizations and Society, 32(4-5): 363-377.

International Journal of Advanced Studies in Humanities and Social Science

The Relationship between Mission Statement and Firms’ Performance

References

References

Volume 9, Issue 1
January 2020
Pages 21-36

The Relationship between Mission Statement and Firms’ Performance

References

References

Volume 9, Issue 1January 2020Pages 21-36

Volume 9, Issue 1
January 2020
Pages 21-36