Mission - Marketing Strategy

The mission of the organization is the unique purpose that distinguishes it from other companies and defines the boundaries of its operations. The mission statement is a proclamation of the organization’s primary objective that encapsulates its core values. The organization’s aims and aspirations are the result of a series of influences(see Figure below).

There are four major sources of influence acting upon the core meaning behind an organization’s existence. Johnson and Scholes (1999)refer to these as:

  • Corporate governance :To whom should the organization be accountable and within what regulatory framework should executive decisions be overseen and reviewed? With any organization these issues which relate to accountability will have an influence on the overall direction of the institution. Some groups that the organization is meant to serve, such as small shareholders, can be very removed from the managers actually running the company. Thus the regulatory framework acts to constrain management freedom and protect the rights of stakeholders.
  • Stakeholders :Stakeholders in an organization include such groups as customers, suppliers, shareholders,employees, financiers, and the wider social community. In reality, even operating within the corporate governance framework, organizations may be inclined to further the interests of particular stakeholder groups according to the power and influence the groups actually wield.
  • Business ethics :An ethical dimension also affects the mission and objectives that an organization should fulfil. This mainly relates to the corporation’s social responsibility to stakeholder groups, in particular those whose power and influence is marginal, such as a local community. Although expectations of an individual’s ethical behavior has significant influence, this ethical domain is subject to cultural attitudes and beliefs.
  • Cultural context :The aspects of mission that are prioritized will reflect the cultural environment that surrounds the corporation. This influence will occur at several levels: at a broad level wider national cultures will be influential; individuals in functional areas will be influenced by the culture of their professional reference groups, and there will also be internal subcultures operating at divisional or functional level within the company. A mission statement then is subject to these influences and needs to address their interests in a manner that allows it to satisfy their diverse demands. In essence the mission statement ought to characterize the organization’s principles and priorities and define the broad product, market and technologies that are core to the business. Missions can be framed with a very narrow view of the business or be given a much broader frame of reference.
  • Narrow focus :Some organizations choose to frame a mission statement with a very narrow focus. An example is Newport News Shipbuilding.The advantage is that it gives a very clear description of the organization’s primary business. However, creating a narrow focus may set unnecessary constraints on the company’s activities in terms of the markets served, the product/service offered or the technology employed.
  • Broad focus :The use of a broad mission statement is fairly common and generally refers to all the various stakeholders in the business: shareholders, customers and employees as well as the area of business to be served. Scottish Power’s mission statement has this broader focus,although it has a reasonably defined business scope. One noticeable stakeholder group not referred to in this mission statement is, surprisingly, the employees. In general, broad mission statements can address the problem of giving too narrow a focus on the business’s area of operation, but can fall into the trap of failing to define clearly the market and product areas that are core to its operation. Richer Sounds is a company that retails hi-fi equipment; however,its mission statement makes no reference to the product or market areas it is concerned with as a business. It does, though, engender a clear vision on the way that business should be undertaken.

Influences on an organization’s mission and objectives

Influences on an organization’s mission and objectives

Successful mission statements have to demonstrate the following characteristics:

  • Credibility :The mission statement has to set realistic ambitions for the organization. In particular they have to be believable in the eyes of stakeholders, and especially the employees.
  • Uniqueness:The mission has to relate to the particular organization. It should not be a statement that could be generically applied to a range of other organizations. The mission has to relate to the company and its stakeholders in a unique fashion.
  • Specific capabilities :The mission should also embrace the core capabilities of the organization and emphasize their core role in the future of the organization.
  • Aspirational :The mission needs to motivate individuals by giving them a statement that has significance to the work they undertake – a vision that is meaningful in terms of more than just making profits. It should engender a vision to which individuals feel they wish to contribute. A mission statement should also define the boundaries of the business’s ambitions. What is the territory that the business wishes to operate within? This is commonly referred to as the scope of the business or the competitive domain. There are several dimensions that have to be considered when defining the organization’s scope:
  • Product scope :This is defined in terms of the goods and services the enterprise supplies to customers. A critical aspect of defining product scope is deciding how to categorize the organization’s products. Some products may fit into a collective category easily, some more important products may be better served listed separately. The product could be defined in terms of its technology.
  • Market scope :Market scope can be difficult to define but it is an important exercise. Market scope should depict the consumers and customers who utilize the company’s products. There are a number of criteria that are helpful in defining market scope, such as:
    • type of industry sector targeted
    • channels of distribution
    • demographics
    • salient features of the consumer
  • Geographical scope :This should be defined at an appropriate level of aggregation – in strictly local terms, for a small business, through to national and international regions for large organizations.

Definitions of the scope of the business based on markets are likely to be safer than a product definition. Particular products and technologies ultimately become obsolete but the consumer’s needs addressed by those products or technologies may endure. There is a danger of marketing myopia developing (Levitt, 1960) if a business’s competitive domain is defined solely according to a product type rather than a market need. Pharmaceutical companies are beginning to redefine their competitive domain in terms of the customer benefits of ‘good health’ rather than in purely product terms of‘drugs’ (Green, 1995). SmithKline Beecham now sees the scope of its business covering four key areas of the healthcare market: prevention, diagnosis,treatment and cure, rather than just research and development of drugs.

Products and services that address these primary market needs may change but the underlying market areas are likely to remain. Stakeholders also have to be considered when developing a mission statement. Stakeholders are individuals or groups who rely on an organization to achieve some of their own personal objectives. At the same time the organization is reliant on these individuals(Johnson and Scholes, 1999). There are a number of different stakeholders that companies try to address and accommodate in a mission statement:

  • Internal :These are the people most directly involved with the organization, therefore the values and attitudes of these groups are a key influence on the aims and objectives of the organization. Internal stakeholders include owners or shareholders, managers,employees and unions.
  • External :These groups do not have the same close relationship with the organization as internal stakeholders do,nevertheless they can be a major source of influence over the direction of an enterprise. External stakeholders can be split into two groups:
    • Primary external stakeholders :These are external groups that have a direct relationship with the organization. They include crucial groups such as customers, suppliers, financiers and competitors.
    • Secondary external stakeholders :These have a less direct relationship with the company and include groups such as government agencies(local, national or international), political pressure groups, the financial community at large and society in general. These groups can exercise influence over the organization through such things as legislation and ethical campaigning.

Criticisms of mission statements are that many are too bland an dill-defined and therefore fail to give clarity to the business’s endeavors. This could well be the result of the development of a statement that attempts to satisfy the interests of all stakeholders in the business. On the other hand,mission statements are sometimes too brief to depict clearly the organization’s strategic intent.

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