The Relationship between Mission Statement and Firms’ Performance

International Journal of Managerial and Financial Accounting, 2012

The purpose of this research was to explore the components in the content of mission statements and investigate the impact of such statements on company performance. Both qualitative and quantitative approaches were used to explore the mission statements and their impact on performance respectively. Data were obtained from the companies listed in Colombo Security Exchange in Sri Lanka. The results revealed that self-concept, concern for survival, and company products and services are predominant in the contents of mission statements. Moreover, considerable attention is paid to include a staff/employee component in the contents of current mission statements. Finally, it was found that the presence of a mission statement has no impact on company performance. Therefore, managers must be aware that these dominating components when crafting their mission statements.

Journal of Management Studies, 1998

This paper examines the relationship between mission statements and ®rm performance using a sample of 136 large Canadian organizations. Previous writings suggest that mission statements are essential for superior organizational performance results. However, there is little empirical evidence to support this claim. The data from the present study demonstrate that mission statements and some of their speci®c characteristics are selectively associated with higher levels of organizational performance. The paper concludes with several propositions to guide future research.

Management Decision, 2001

A relationship between mission and organizational performance was modeled by drawing on previous research. The model was tested with data from 83 large Canadian and US organizations. We found that mission statements can affect financial performance, however, not as one might have anticipated initially. Several mediating elements were observed to exist. For instance,`c ommitment to the mission'' and the``degree to which an organization aligns its internal structure, policies and procedures with its mission'' were both found to be positively associated with`e mployee behavior''. It was this latter variable which was observed, in turn, to have the most direct relationship with financial performance.

2015

For effective performance of any business, the enterprise must clearly define its purpose-driven mission statement, technology, values, concern for society and public image in order to survive, remain relevant and successful. All five factors are significant characteristics in mission statements that show how effective the organization can attain high productivity. This study was conducted to investigate the relationship between mission statement and company performance in the banking sector in Nigeria. Data were collected through the use of structured questionnaires administered to a pre-determined sample size of five selected major banks in Nigeria. Data were analyzed and the five hypotheses tested using correlation and multiple regression. This study shows that with purpose-driven mission statement, companies’ turnover, customers’ satisfaction, social responsibility and shareholders’ equity can be achieved. Though it is observed that to achieve the afore–mentioned factors, concep...

International journal of contemporary …, 2003

Webology

This study examines mission statements and management effectiveness in “first generation” insurance companies in Nigeria. Content analysis method has been applied with the mission statements and data collected from annual reports (2013-2018) of six insurance companies. In terms of the data analysis, Pearson correlation and descriptive statistics have been employed. The results suggest that the mission statements’ components including the product/service, growth orientation, competences, public image and personnel are crucial for management effectiveness proxied by two ratios of return on equity (ROE) and return on assets (ROA). The study, therefore, recommends that businesses must include in their mission statements, product/service, growth orientation, competences, public image and personnel mission statement components. The study drawback is the small sample size. The study has also proposed area for further research and managerial implications.

2005

A relationship between mission and organizational performance was modeled by drawing on previous research. The model was tested with data from 83 large Canadian and US organizations. We found that mission statements can affect financial performance, however, not as one might have anticipated initially. Several mediating elements were observed to exist. For instance,`c ommitment to the mission'' and the``degree to which an organization aligns its internal structure, policies and procedures with its mission'' were both found to be positively associated with`e mployee behavior''. It was this latter variable which was observed, in turn, to have the most direct relationship with financial performance.

European Journal of Business and Management, 2014

This article synthesises the findings of a study carried out on the relationship between the mission statement and performance in the banking sector. Four commercial banks-the Credit and Rural Development Bank (CRDB), Bank of India, National Microfinance Bank (NMB), and the National Bank of Commerce (NBC)-were involved in the study. Data collection was done through the administration of a semi-structured questionnaire with 64 employees from the four banks and interviews held with eight top management employees from the four banks, two from each bank. Data from the questionnaire was subjected to qualitative statistical analysis whereas interview information was subjected to content analysis. Results show that the more the employees understood the mission of their respective bank, the more they invested extra efforts in making sure that they performed accordingly to meet the bank's performance standards required of them. The CRDB and NBC, which were found to be banks that commit more efforts to making their mission statements well known among employees in addition to addressing the future of the business in a comprehensive manner, demonstrated that their employees were motivated and outperform those the NMB and Bank of India, which were less inclined to do so.

papers.ssrn.com

This study first identifies the importance of mission statement for an organization and then tries to find out the quality of mission statements of the listed Public Limited Companies (PLCs) in Bangladesh. The nine criteria suggested by Fred R. David (2003) were taken as benchmark for this study. The annual reports of a sample of 167 PLCs have been surveyed to determine the nature and extent of disclosure by computing total score and a Mission Statement Disclosure Index (MSDI). The study results show that 55 companies (32.93%) are disclosing mission statements with a mean score of 4.145 out of total score 9 (MSDI 46.00). The results also show that the companies are focusing more on customers and concern for survival, growth and profitability and little focus is placed on self-concept, technology and market. As the average score of the companies are below 4.5 (half of the total score possible), conclusion has been drawn that the companies are preparing and disclosing the mission statements without having proper knowledge of the characteristics of the mission statement from strategic management viewpoint.

African Journal of …, 2010

A well established organization definitely would have its mission as it provides vivid directions to its employees to achieve their entrusted task within defined ambit. This study aims at measuring impact of organization's mission on performance in Banking, Telecommunication and Pharmaceutical Sector of Pakistan. To ascertain effect of mission on organization performance, Denison Organizational Culture Survey was used. Data collected from renounced organizations of different portfolios were selected using instrument with a total sample of 542. Pearson correlation test was used to prove relationship between mission and its elements with organizational performance. Results indicate highly positive relationship between mission and performance. Regression analysis of data shows that organization performance increases by 74 -79% due to focus of employees in attainment of goals set in through organization mission. Clear definition of mission is essential to achieve high performance in the organization. It would afford opportunity to employees to discharge their function under broader framework. It would also become a significant contributory factor for enhancing organizational performance. Organizations inspiring to improve their performance are taught to define mission for an organization and employees to remain focused in discharge of their responsibilities. Organizations according to due importance to their well-defined mission would channelize their resources and attain growth through expanded resource: hence it's imperative to make use of this component of organization.