The effects of mission, vision, values and strategy on company operation
How can a company prepare for and react to changes in the market?
Understanding the environment is essential from external point of view, in order to better prepare for operational business. However, understanding what it is exactly that the company does, how its going to do it and where do they want to be in the future are questions that can make or break the company. (Weeks 2018.)
Company strategy planning requires you at some point to answer the question of “what is your mission and vision?” The two serve the purpose of acquiring the result you intend to obtain. So, what’s the difference and is there a difference? Bringing meaning to these definitions assist companies to build a strategy that will answer the demand of the everchanging market. (Wadhwa 2016).
In this writing we will go through the basic concepts of mission and vision and bring examples for them. Then we will look at the influence that the market demand has on a company, the effects of the changes in the market can lead a company to bankruptcy or to a path of success. Understanding these concepts aid us to better prepare for the future and react to changes accordingly.
How does mission and vision affect a company?
(definitions and examples)
A mission is a statement that answers three simple questions: 1. What do you do? 2. For whom do you do it? and 3. What’s the benefit? Answering these questions in a statement you explain the overall purpose of the organization. (Wilkinson 2013.)
Let’s look at SpaceX, it’s a company that explores space technology and invests in revolutionary innovations. The mission statement is: “The Company was founded in 2002 to revolutionize space technology, with the ultimate goal of enabling people to live on other planets.” Their mission statement is brilliant, they answer three questions mentioned above and they declare the ultimate impact they wish to have on humanity in general. (Mission statements 2019.)
Still a bit unclear? Let´s look at other definitions of mission statement´s. A Mission statement describes organizations purpose and its overall intention. Basically, in that statement we describe the very reason the company exists. The mission statement is to support the vision of the company. It clarifies and communicates the company’s purpose to customers, staff’s stakeholders and other vendors. To further assist in building your own mission statement SHRM offers two questions to consider: What is our organizations purpose? and Why does our organization exist? (SHRM 2018.)
Pan America World Airways is known as the Aviation’s historic symbol. It was founded 1927 and went bankrupt in 1991. They too had a mission and stated it: “to take messages of friendship from the United States to the governments and people of Central and South America, promote U.S. commercial aviation and forge aerial navigation routes through the Americas.” (Boon 2018; Pan American Good Will Flight 2015.) They declare in their statement who they are, what they do and finally what’s the benefit. Their purpose is obvious.
Then the mission already explains everything so, why do we need a vision? The two definitions clearly walk hand in hand and are ambiguous to understand. Vision gives you the explanation of how the company want its future to look like. If everything goes as planned, what will the future be like? (Wilkinson 2013.) SHRM explains vision to be an image of the ideal state the organization wants in the future to be in. The picture is to be inspirational and should challenge employees. SHRM offers some questions to consider when building your own vision and they are: What problems are we seeking to solve? Where are we heading? and finally If we achieved all strategic goals, what would we look like in 10 years from now? (SHRM 2018.) Hence there is a difference in these two statements, and they are built to support each other
Pan am did not have an official vision, their core idea was declared in the mission statement (Boon 2018). SpaceX, however, states its vision very simply: “To advance the future”. Their statement is implied based on their primary objectives which are innovation and finding ways for people to live in other planets. That’s the future they want to be in, and they say it with one line, that is at the same time extremely inspirational. (Mission statements 2019.)
How does the changing market influence a company’s mission and vision?
Declaring your mission and vision entails that you have clearly defined your core values. Then the decisions that are made should be in line with these statements. But what if the market changes? When to modify or fix these statements? Every organization has to wrestle with these questions. According to Hattangadi business environmental changes are constant, hence organization should constantly change and adapt to new situations. However, these changes do not include undying core values, what should never stop changing are operating practices and cultural norms (Hattangadi 2015.)
They are not carved in stone. As your company grows and the field your operating in changes, your mission and vision should change as well (Medwick 2018.) Reviewing the two statements is always a good idea. The philosophy of a company might change completely due to internal changes like change of the CEO or VP. External factors that might impact to start a change are for example economical, social or political changes. (Hattangadi 2015). An example of a policy change that forced the companies to adapt and question their very core was Medicare Modernization Act set in 2003 in the US. (weeks 2008).
Weeks 2008 writes in his article of “Revisiting Your Company's Vision and Mission” that the biggest mistake most companies do is that their statements are broad or vague. Making your statements clear, focused and target the areas or niches of interest gives the ability to know what exactly is going wrong and what parts needs to be modified.
What strategies can a company use to remain successful?
Well now we have our mission and vision, we´ve clearly identified our values and core abilities. What’s next? The next step is to align a set of actions or tactics with parts of our mission in order to achieve them, this is called strategy. A strategy is a long-term plan of actions that is created to obtain desired future that is envisioned in the company’s mission and vision. One way to start the process is to identify strengths and weaknesses in the context of the environment. SWAT analysis is one tool to be considered where threats and opportunities are taken into consideration. Another tool is PESTEL analysis which assist in identifying the broader environment, taking into consideration social and political factors as well. Using these tools and identifying the environment gives the ability to choose the wright strategies of decision. (Weeks 2008.)
For a company to stay competitive, it must produce and implement a strategy that is steadfast. For example, Amazon has been successful for years and their success continues to thrive. Amazons strategy is tightly tied to their vision. A strategy is good when all the hypothesis that are made during its formation are based on facts that have been validated. These strategies will assist in investment planning, resource optimizations, project prioritizing and other activities. (Reddy 2018.)
After identifying mission and vision, we have the outline of operation for all levels of the company. Creating the strategy, we must remember that different levels of the company operate with different tools, hence there is always a need for multiply strategies. Typically, three levels are identified an they are: 1. Corporate level strategy, where the strategy is long-range and action-orientated, this type is framed by the top management. 2. Business level strategy, is established by the general managers to convert mission and vision into tangible strategies. 3. Functional level strategies, are developed by first line management, this type includes decisions at the operational level like production, human resource, research and finance (Business Strategy n.d.)
Companies work in an ever-growing competitive environment (Reddy 2018). In order to stay in business, internal factors such as mission, vision, values, core abilities and strategies must be clarified in targeted and focused manner. External factors must be clearly described, and all assumptions made have to be based on validated research. Internal and external factors give the basis for future decision making; hence they are to support each other (Reddy 2018; Weeks 2018.)
Boon T. 12 October 2018. The Story Of Pan American World Airways. Simple flying. URL: https://simpleflying.com/the-story-of-pan-american-world-airways/. Accessed 3.10.2019.
Business Strategy N.D. Business Jargons. URL: https://businessjargons.com/business-strategy.html. Accessed 3.10.2019.
Hattangadi V. 14 December 2015. Changing and Aligning of Vision and Mission Statements. URL: https://drvidyahattangadi.com/changing-and-aligning-of-vision-and-mission-statements/. Accessed 3.10.2019.
Medwick K. 13 February 2018. Why, When and How to Change Your Mission Statement. Firespring. URL: https://blog.firespring.com/why-when-and-how-to-change-your-mission-statement/. Accessed 3.10.2019.
Mission statements 12 July 2019. SpaceX mission and vision statement analysis. URL: http://mission-statement.com/spacex/. Accessed 3.10.2019.
Pan American Good Will Flight 09 April 2015. National museum of united states air force. URL: https://www.nationalmuseum.af.mil/Visit/Museum-Exhibits/Fact-Sheets/Display/Article/196945/pan-american-good-will-flight/. Accessed 3.10.2019.
Reddy N. 12 Februrary 2018. Want A Successful Business? Build An Effective Strategy. Forbes. URL: https://www.forbes.com/sites/forbescoachescouncil/2018/02/12/want-a-successful-business-build-an-effective-strategy/#3f0b1cea69bf. Accessed 3.10.2019.
SHRM 05 March 2018. Is there a difference between a company mission and vision and value statements? URL: https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/isthereadifferencebetweenacompany%E2%80%99smission,visionandvaluestatements.aspx. Accessed 3.10.2019
SpaceX 2019. about-page. URL: https://www.spacex.com/about. Accessed 3.10.2019.
Wadhwa S. December 2016. Impact of Vision and Mission on Organizational Performance in Indian Context. The International Journal Of Business & Management, 4, 12, pp. 165. URL: https://www.researchgate.net/publication/315803777_Impact_of_Vision_and_Mission_on_Organizational_Performance_in_Indian_Context. Accessed 3.10.2019.
Weeks W. 01 May 2008. Revisiting Your Company's Vision and Mission. Homecare. URL: https://www.homecaremag.com/mag/revisiting_companys_vision_mission. Accessed 3.10.2019.
Wilkinson M. 30 January 2013. There’s a difference: mission v. vision. Strategic Planning. URL: https://managementhelp.org/blogs/strategic-planning/2013/01/30/theres-a-difference-mission-v-vision/. Accessed 3.10.2019.