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Defining the Company's Mission and Social Responsibility

Chapter Summary

Defining the company mission is one of the most often slighted tasks in strategic management. Emphasizing the operational aspects of long-range management activities comes much more easily for most executives. But the critical role of the mission statement repeatedly is demonstrated by failing firms whose short-run actions have been at odds with their long-run purposes.

The principal value of the mission statement is its specification of the firm's ultimate aims. A firm gains a heightened sense of purpose when its board of directors and its top executives address these issues: "What business are we in?" "What customers do we serve?" "Why does this organization exist?" However, the potential contribution of the company mission can be undermined if platitudes or ambiguous generalizations are accepted in response to these questions. It is not enough to say that Lever Brothers is in the business of "making anything that cleans anything" or that Polaroid is committed to businesses that deal with "the interaction of light and matter." Only if a firm clearly articulates its long-term intentions can its goals serve as a basis for shared expectations, planning, and performance evaluation.

A mission statement that is developed from this perspective provides managers with a unity of direction transcending individual, parochial, and temporary needs. It promotes a sense of shared expectations among all levels and generations of employees. It consolidates values over time and across individuals and interest groups. It projects a sense of worth and intent that can be identified and assimilated by outside stakeholders, that is, customers, suppliers, competitors, local committees, and the general public. Finally, it asserts the firm's commitment to responsible action in symbiosis with the preservation and protection of the essential claims of insider stakeholders' survival, growth, and profitability.

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