An organization should have a clearly defined mission that guides decisions and (along with an organizational vision) future directions. While organizations’ missions are typically stable, changes in scope and sometimes even purpose do occur. Sometimes these changes are intentional, and the rationale is easy to discover. but sometimes this is not the case. A common occurrence known as mission creep can happen when an organization’s scope expands, often incrementally, in a direction that was not originally intended. You will also see changes in mission caused by market expansion or contraction, mergers and acquisitions, innovation, changing societal needs, and so on.
Another common occurrence, known as mission proliferation, can happen when different parts of the organization articulate and publish independent missions, often to help inspire and direct those working in subunits. In theory, each subunit mission statement should align with and support the organization’s mission, but this is not always the case and deviations from the organization's mission may contribute to confusion. This outcome may be especially true in organizations that are large and complex, or in ones where decision making is decentralized.
An organization's mission may be found in a formal published statement or explained verbally be the CEO or another senior leader. Public sector organizations sometimes have two organizational mission statements—an official version that is long and detailed, and an abbreviated version used for public dissemination. A mission can change over time, and it can be instructive to examine the process used the bring about that change. It is also useful to ask whether there is evidence an organization's mission is having a positive impact on its performance.
Check Your Knowledge
What purposes should an organizational mission serve?
What is mission creep?
One of the potential challenges associated with organizational missions is mission proliferation. Explain what this means and why it can be problematic.
What are some of the things that a mission statement should accomplish?
- provides a broadly phrased statement of the firm's long-term goals
- distinguishes the organization from others in the same industry
- for the organization's product or market, clarifies the scope of operations
- defines the organization's goals and aspirations
- (ideally, it provides a focus for the organization's actions
Source: Cavanagh, 2008, para. 1.
What are some of the problems that can occur in the absence of an effective and organizational mission and well-written mission statement?
- Managers may make decisions based upon their individual biases, priorities, and preferences.
- Time and resources may be wasted through pursuing actions that do not contribute to the achievement of the organization's goals.
- The organization may not perform as well in the marketplace as competitor organizations that do have strong mission statements.
Source: Cavanagh, 2008, paras. 4, 6, 15.
Below are mission statements for Coca-Cola and Pepsi published on their corporate websites in 2016. Apply what you have just read about effective missions and mission statements to an analysis of these two examples.
- Which statement does the best job describing the company's purpose and why? What about if you were an investor?
- Would your conclusion change if you were looking at this from the perspective of a customer? What about if you were an employee?
Coca-Cola Our Mission Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions. To refresh the world… To inspire moments of optimism and happiness… To create value and make a difference.
Pepsi As one of the largest food and beverage companies in the world, our mission is to provide consumers around the world with delicious, affordable, convenient and complementary foods and beverages from wholesome breakfasts to healthy and fun daytime snacks and beverages to evening treats. We are committed to investing in our people, our company and the communities where we operate to help position the company for long-term, sustainable growth.
Pepsi's mission statement is specific about the business the company is in: food and beverages. The statement also clarifies the standards Pepsi holds itself to by including the terms delicious, affordable, convenient, wholesome, and healthy in its statement. Finally, Pepsi ends its mission statement by speaking to important corporate values.
In contrast, if you didn't know the business Coca-Cola is in its mission statement wouldn't help you figure it out. The phrase “refresh the world” might serve as a hint for some but if you had never heard of Coca-Cola it would be pretty difficult to figure out what the company actually does. The other parts of the firm's mission statement are equally vague. One possible advantage of Coca-Cola's mission statement is that it leaves scope for creativity and innovation if the company's leadership chooses to diversify.
With these observations as background, it is fairly easy to argue that Pepsi's mission statement does a better job of specifying the organization's purpose. As for the investor's perspective, much would depend upon the person's priorities. Someone looking for a dynamic company open to expanding its scope of business might be drawn to Coca-Cola's mission. An investor interested in a company committed to its current business might find more comfort in Pepsi's mission statement.
Of course, a wise investor would want much more information about both companies. A potential customer would almost certainly find Pepsi's mission statement more useful. Similarly, employees would probably be attracted to Pepsi's mission statement because it includes a commitment to investing in its people.