Effects Of Vision And Mission Statement On Firms’ Survival

Effects Of Vision And Mission Statement On Firms’ Survival

Abstract

The mission statement is becoming an integral part of firms operating plans for both public and private firms within and outside Nigeria. This study was set to bring fore effect of vision and mission statement on firms’ survival.

The study employed a descriptive survey and a research questionnaire was used for data collection; one hundred questionnaires was distributed to employees at Nestle PLC Sagamu. The data collected were thus analyzed using frequency count and t-test statistics. The findings of the study revealed that there is no significant difference in the perception of male and female workers on the effects of vision and mission statement and also there is no significant difference between the survival of firms that use vision and mission statement and those that do not use.

The study therefore recommends among others that firms should find the means of surviving the present economic hardship, which can hinder the time of implementation of the formulated strategies. The management should establish the need for vision and mission statement planning by defining the corporate goals and formulating policies which acts as a guide in decision making.

Chapter One

Introduction

1.1 Background of the Study

The mission statement is becoming an integral part of firms operating plans for both public and private firms within and outside Nigeria. Indeed, many modern organizations prepare a simple or small draft documents that bear what their mission statements or their equivalents for a certain period of time. Specifically, for firms with a profit motive, the vision and mission statement constitute their preambles of what they want to achieve and how to achieve them when preparing business plans, strategic and operating plans, and even when they draft letters to apply for loans from commercial banks. At the same time, pundits of strategic business management claim that well-defined vision and mission help organizations to align individual employees’ objectives with corporate plans.

It is in this regard that strategic plans, which articulate business missions and objectives as well as the creation of business departments including marketing and customer care, have been given due weight in the past (Dorrian, 1996; David, 2007). In fact, the inclusion of mission statements in business documents almost appears there to stay in formally operating businesses even if its contribution to the marketing and customer care activities in business entity remains unclear. Mission and vision statements have been overwhelmingly accepted as an indispensable part of the strategic management process for organizations of all types; be it public sector, not-for-profit, private, for profit, a multinational or a small and medium scale enterprise. It is widely believed that mission and vision statements impact on strategy and most aspects of organizational performance. Most firms have mission and vision statements. In the worst case scenario, mission and vision statements are implied implicitly.

Mullane (2002) argued and supported it empirically that mission and vision statements are useful for practical day-to-day operations, taking a contrary view to those who assert they are archaic documents that are typically exhibited as wall hangings. (Campbell and Yeung, 1991) have delineated how mission and vision statements can be used to build a common and shared sense of purpose and also serve as conduit through which employees‟ focus are shaped. Other schools of thought believe mission and vision statements tend to motivate, shape behaviours, cultivate high levels of commitment and ultimately impact positively on employee performance (Mullane, 2002)

Strategic management expert Toffler (2003) writes that a firm without a strategy is like an airplane weaving through the skies, hurled up and down, slammed by winds and lost in the thunder heads. If lightning or crushing winds do not destroy it, it will simply run out of gas. In a similar line of thought, Ross, Rosenberg, Schewe, and Perry (2000) note that, without a strategy an organization is like a ship without a rudder. It goes round in circles and like a tramp, has no specific place to go. Clearly, these statements emphasize the importance and the need for a comprehensive, systematic and dynamic vision and mission planning for every firm which seeks to survive competition in the ever changing global competitive business environment. Ansoff (1970) argues that planning generally produces better alignment and financial results in companies which are strategically managed than those which are not. This suggests an apparent correlation between strategic planning and the ultimate performance of a firm in terms of its growth, profits, attainment of objectives and sustained competitiveness (Strickland, 2004).

Though these assertions are largely true, exceptional situations also arise when some companies gain not because they had in place any strategy but because they just benefited from some sudden conditions in the external environment. Nonetheless, and still consistent with the need for evolving and constantly reviewing strategy, it is important to note that having a sound strategy in itself does not necessarily translate into desired performance goals if it is not properly implemented. Both strategy and implementation must be good and timely to achieve positive results. As for a firm driven by wrong strategic planning, Malamud (2004) likens it to a train on a wrong track saying, every station it comes to is the wrong station.

These fundamental principles essentially hold true for all industries globally and as should be expected, management is subject no less to the dynamics of these tendencies. It is assumed that strategic planning, like other management initiatives developed basically for business, can be adapted in spite of the differences between profit and not-for-profit organizations. Vision and mission statement provides the basic direction and rationale for determining the focus of an organization; and also provides the specification against which any organization may best decide what to do and how to do it. Simply put, it is a process for creating and describing a better future in measurable terms and the selection of the best means to achieve the results desired. It is important to note that not all planning is actually strategic even though they may be termed so. It is said that failure to plan leads to planning to fail.

Vision and mission statement provides the basic direction and rationale for determining the focus of an organization; and also provides the specification against which any organization may best decide what to do and how to do it. Simply put, it is a process for creating and describing a better future in measurable terms and the selection of the best means to achieve the results desired. It is important to note that not all planning is actually strategic even though they may be termed so. It is said that failure to plan leads to planning to fail. Strategic planning standardizes the processes of goal/objective setting, situation analysis, alternative consideration, implementation and evaluation that enable an organization to attain its goals and objective. Sarason and Tegarden, (2003) asserted to the positive correlation between strategic planning and performance achievements as very beneficial for organizations.

1.2 Statement of the Problem

Managements lead role requiring strategic thinking, planning, decision-making and ultimate implementation could also have much to contribute to the fortunes or otherwise of the various organizations in their respective industries. Much as the differences in the performance levels of various organizations are to be expected, it is still strongly believed that the vision and mission pursued by each organization are largely accountable for the outcome of their survival.

Vision and mission is a difficult process which requires that people think and act creatively. The Vision and mission planning process is used by management to establish objectives, set goals, and schedule activities for achieving those goals and includes a method for measuring progress. These goals can be accomplished through the steps of the strategic plan, beginning with an external and internal analysis, a clearly defined mission statement, goals and objectives, formulation of specific strategies, concluding with the implementation of the strategy and managed control process. The problems that most firms faced in Nigeria is as a result of vision and mission statement and it has brought upon many firms failure to meet yearly demands, profits etc. Hence, there is need to examine the effect of vision and mission statement on firms’ survival.

1.3 Objectives of the Study

The objectives of the study are:

1. To examine the need for vision and mission statement in organization.
2. To assess the perception of male and female workers on effects of vision and mission statement.
3. To identify the survival of firms that use vision and mission statement strategy as opposed to those that do not use in the industry.
4. To highlight the challenges faced by the firms which practice vision and mission statement strategy.

1.4 Research Questions

1. Is there a need for vision and mission statement in every organization?
2. Is there a significant difference in the perception of male and female workers on effects of vision and mission statement on firms survival?
3. Is there a significant difference between the survival of firms that use vision, mission statement and those that do not use?
4. What are the challenges faced by the firms which practice vision and mission statement strategy?

1.5 Research Hypothesis

H01: There is no significant difference in the perception of male and female workers on effects of vision and mission statement.

H02; There is no significant difference between the survival of firms that use vision and mission statement and those that do not use.

1.6 Significance of the Study

This study is expected to have effect on strategic planning practitioners management of firms, academia and the general public. The outcome of this study is to supplement the existing store of knowledge on the subject of vision and mission statement and also serves as a channel for further research on innovative ways of gaining competitive advantage for the overall business well-being of the nation.

In addition, the research and its findings are expected to help inform firms in the area of utilizing vision and mission statement and also elucidate on decision making in the area of strategic management using strategic planning.

This study will be very useful to other researchers interested in the area, that is, the outcome of this study will serve as a base for business tycoon, academicians who might want to conduct further studies on effect of vision and mission statement strategy.

1.7 Methodology Study Area

Research design means the structuring of investigating aimed at identifying variables and their relationship to one another. The was undertaken at Nestle Nigeria PLC located at Sagamu in Ogun State.

The research designs under this methodology is survey design, the research population will comprise employees of Nestle Nigeria PLC located at Sagamu in Ogun State.

Instruments of Data Collection

Two methods were employed for gathering of information of this study which are primary and secondary data. A primary data is a direct source and it will be a self constructed questionnaire that would serve as the research instrument for data collection and the secondary data will be journals, online materials etc.

Data Analysis

The package that was used in analyzing data in this research work is the statistical package for social science (SPSS) expressed in a simple percentage. Therefore the statistical method that was employed in this research work is t-test statistics.

1.8 Scope of the Study

This study was restricted to employees of Nestle Nigeria PLC located at Sagamu in Ogun State.

1.9 Definition of Terms

Vision:

It is generally seen as a picture of the future. It is a picture of excellence, something that the person, team or firm wants to create in its best possible future.

Mission:

It is an assumed responsibility of the firm born from its social goals. Mission reflects the way in which vision can be transformed into a tangible existence for the firm.

Firms:

It is defined as a business organization that owns, operates, employs productive resources to obtain products and/or services which are offered in the market with the aim of making profit.

1.10 Definition of Terms

This study was structured into five (5) chapters.

Chapter one is the introductory chapter and gives the background to the study, states the research problem, objectives of the study, research questions, significance of study, structure of the study, the scope and operational definition of terms.

Chapter two is on the review of literature relevant to the study scholars and researchers in the field of strategic management.

Chapter three dealt with the specifics of steps, tools and procedures that were taken to collect data needed to address the research problems.

Chapter four was dedicated to the analysis and discussion of data collected in the field surveys.

Chapter five which is the final chapter captures the summary of findings, conclusions and recommendations.

Chapter Five

Conclusion and Recommendation

5.1 Conclusion

It is worthy to note that mission statement is highly valued and applied by the most successful and best managed organizations in Nigeria. For example, Nestle Nigeria PLC has been one of the top four best companies in Nigeria which they believed that having a conducive environment to do business, being a customer oriented organization, making use of well-motivated employees that are technologically oriented will result in creating a long term value for their shareholders through returns and investment. Similarly, it leads in the provision of the highest standard of service and goods protection and risk management services through the help of a group of well-trained and highly motivated professionals in service delivery, achieving customers’ satisfaction and creating wealth for National development.

As well as the company is to be a service provider of choice, bringing as a goods and servics tool to the consciousness of all, adding value to our clients and other stakeholders in an efficient and reliable manner. A study by Rigby (1994), rated mission statements second of all used tools particularly because they believe it is a useful ingredient in organizational integration which gets everyone focused on objectives and working together to pull in the same direction. However management needs to put in measures to get them acquainted with it on a more frequent basis. Regardless of the label, a mission statement specifies the fundamental reason why an organization exists (Amran,2012).

5.2 Recommendations

The study recommended that management of companies should push for better survival by finding ways to improve the existing mission and how it is being executed. Where an organization has no outstanding competencies and survival, it still must shape its mission to suit its particular skills and available resources and emerging economic activities. companies in Nigeria need to understand the ‘prons and cons’ of mission statement and to be skilled in it formulation, mission statement analysis and methods of mission execution is a basic aspect that all managers should always take into consideration. Most visitors are looking for information, not a hunt by making your mission stand out from the rest of your content (big andbold).

Mission statement should be easy to find. The companies should have a well-conceived mission that can prepare the company for the future, establish long-term direction and indicate the company’s intent to stake out a particular business position. Orienting employees about the organization’s mission statement so as to coordinate all efforts towards actualizing the stated organizational objectives must also be considered. Putting together a strong management team with the right personnel and mix of skills should be taken into consideration in implementing mission statement. Serious attention should be given to the identified problem areas of “orientation, implementation and evaluation” with particular reference to resource allocation (human and materials) and reviewing bases of mission, thereby ensuring the needed improvement. Campbell & Tawadey (1992) note that “mission statement is made real only when it affects the behaviour and guides the peoples’ actions.

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Frequently Asked Questions

What is the importance of mission and vision statement?

Mission and vision statements play three critical roles: (1) communicate the purpose of the organization to stakeholders, (2) inform strategy development, and (3) develop the measurable goals and objectives by which to gauge the success of the organization’s strategy.

Do firms with clearly communicated mission and vision perform better?

Moreover, firms with clearly communicated, widely understood, and collectively shared mission and vision have been shown to perform better than those without them, with the caveat that they related to effectiveness only when strategy and goals and objectives were aligned with them as well (Bart, et. al., 2001).

What happens to a company’s vision and mission when it dies?

But when the Vision and Mission are an integral part of the organisation they give the company strength and direction well after those who helped create it are gone. A charismatic leader or founder may leave, or C level management may change, but the company continues from strength to strength. 

Do vision & mission statement influence organizational performance?

The results indicate that vision and mission significantly influence organizational performance. It is further seen that it’s not just the formation of vision & mission statement but its content, communication, implementation and contribution all are equally important.

Does mission statement influence the organization’s corporate image?

The late 1980s period witnessed the emergence of studies of how mission statement influences the organization’s corporate image. Achua and Lussier (2016) defines organization mission statement as an enduring statement of purpose that distinguishes one organization from the other similar enterprises.

What is an organization’s vision?

The vision clearly states the direction of an organization, their magnetic north. Simply put, the vision reflects where the organization desires to go. A concise example comes from the Feeding America vision—“A hunger-free America.”

Can a company combine its vision and mission statements?

Sometimes companies combine their vision and mission into one statement. When a company does this, it is important to ensure they have defined both what they do and what they want to accomplish. A company’s vision and mission statements can change as the company grows and achieves its original goals. Example vision and mission statements

Are mission and vision statements a waste of time and money?

Mission and vision statements can be great means to give an organization focus, coherence, and direction. But often they don’t. And if not, the time and money spent on formulating them may become a waste of time—or worse, a distraction keeping the organization’s attention away from what it really should be working on.

What is the relationship between mission vision and values?

Mission, Vision, and Values. Mission and vision both relate to an organization’s purpose and are typically communicated in some written form. Mission and vision are statements from the organization that answer questions about who we are, what do we value, and where we’re going. A study by the consulting firm Bain and Company reports that 90% …

Why is it important to have a clear mission and vision?

It will mean that your people know the mission or vision and live up to it—after all, that is why they probably joined the organization in the first place. If your organization is not driven by a clear mission or vision, this is great too.