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International Journal of Contemporary Hospitality Management

Mission statements exposed


Tahir Sufi, Howard Lyons,
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Management, Vol. 15 Issue: 5, pp.255-262, https://doi.org/10.1108/09596110310482173
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Mission statements exposed

Tahir Sufi
Centre for International Hospitality Management, Sheffield Hallam University,
Sheffield, UK
Howard Lyons
Centre for International Hospitality Management, Sheffield Hallam University,
Sheffield, UK

Keywords where profit maximization was the only


Hospitality industry, Introduction business objective. However, Drucker (1959)
Mission statements,
Mission statements are said to be an proposed that the central objective of the firm
Financial performance, Strategy
inseparable part of corporate strategy should be its survival. Survival is achieved
through focusing on a set of goals. For
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Abstract because they have an impact on performance.


In the strategic management
However, research does not conclusively Drucker profit maximization per se is
literature mission statements are
support this assertion. This article reports misplaced. Stakeholder theory indicates that
said to be an inseparable part of
corporate strategy. It has been our study of the relationship between the balancing the conflicting claims of the
argued that they have an impact financial success of hospitality enterprises various stakeholders in the firm, which
on the performance of the
and the quality of mission statements. The include investors, managers, workers,
organization, yet the evidence is suppliers, and customers, should derive the
unclear. This study is an conclusion of this research is that there is no
significant relationship. As the purpose of objectives of the firm. The firm has a
investigation into the relationship
between the financial success of responsibility to all stakeholders and a firm's
mission statements is self-evidently sensible,
hospitality enterprises and their objectives must be configured to give each a
we briefly reflect on how they may be
mission statements. Mission measure of satisfaction.
statements of 30 top hospitality designed to improve performance.
Notwithstanding the stakeholder analysis,
enterprises were evaluated. This
sample is of significance as it share price maximization is probably the
represents some of the largest most important goal of most of the
corporations, and about 200 of the Mission statements: what the corporations. Share price is a surrogate that
largest brands in the hospitality literature says represents the view of the market on the
industry. The mission statements
were scored and these scores
The study of mission statements started in ability of a firm to make profit and to
were tested for correlation with the early 1970s, and Drucker (1971) referred to generate wealth. Ansoff (1985) explained that
three financial performance them as a precursor to ``clear and realistic capital investment theory makes no use of
indicators. The results indicated business objectives''. Since Drucker, the concept of ``strategy''. Rather, return on
that while there was a statistically
researchers have used a range of emotive the capital employed focuses the firm for the
significant correlation between
the mission statements and the terms to describe mission statements, creation of new opportunities. Thus the
annual turnover, there was no including: importance of objectives and goals are more
significant correlation with the net . ``smoke and mirrors'' (Barktus et al., 2000); important to strategy formulation than
profit margin or the return on anything else.
. ``building blocks, invisible hand'' (Strong,
equity. The article concludes by
considering how firms may 1997); and Businesses are influenced by worldview
improve their performance by . ``motherhood statements, the hippocratic and philosophy, termed ``organizational
better managing their mission oath, lantern, anchor, conscience, office vision''. Lynch (2000) explained that in
statements. developing the future of the organization
manifesto, company slogan and motto''
(Fletcher, 2001). there is a need to develop a vision of the
organization's future. The vision is of the
Mission statements now have a key place in possible and desirable future state or long-
both the literature, and company strategic term aim of the organization, and also the
planning processes. backdrop of purpose and strategy. Hussey
Mission statements are often based on the (1998) explained that the vision statement
founding values of entrepreneurs, although should include the values of the organization.
increasingly generated by professional Objectives are needed (derived from the
managers with an eye to internal and vision), linked to the measurement of
International Journal of external stakeholders. Historically business
Contemporary Hospitality corporate progress, cascaded down to
Management was regarded as an economic institution personal standards of performance. Even
15/5 [2003] 255-262
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[ 255 ]
Tahir Sufi and Howard Lyons though vision and mission statements are principles that are not to be confused with
Mission statements exposed distinct in the strategic management the specific cultural or operating practices,
International Journal of literature, many companies confuse them. nor to be compromised for financial gain or
Contemporary Hospitality This provided a research problem and we short-term expediency. They further
Management
15/5 [2003] 255-262 sometimes had to infer the company mission explained that the key step in building a
statement for the purpose of analysis in our visionary company is to articulate core
research. An example of this proxy is the ideology, which is expressed as:
vision/mission statement of Hilton Hotels Core ideology ˆ Core values ‡ Purpose:
which states:
Building on our rich heritage, and the The core ideology of fast food chain Wendy's
strength of the Hilton Brand, we will make is explained in its mission statement:
our hotels the first choice of the world's Our organization has a strategic vision
travellers in a competitive global market. We focused on these core values:
will achieve this vision through aggressive
expansion, leveraging our resources, fast, Quality: Freshly made products and superior
focused and flexible delivery of innovative service are our passion; consistent Excellence
products, services and processes, consistently is our goal.
exceeding expectations, empowerment Integrity: We keep our promises. All actions
through training and accountability, are guided by absolute honesty, fairness and
continuously improving our balanced score respect for every individual.
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card. The result: a world-class brand and


loyal customers, our shareholders/owners, Leadership: We lead by example and
the community, the strategic partners, and encourage leadership qualities at all levels.
our Hilton Team members. Everyone has a role to play.
People Focus: We believe our people are key to
This vision of Hilton Hotels is also its
our success. We value all members of our
mission statement. Another example of the
diverse family for their individual
combining of vision/mission statements is contributions and their team achievements.
that of McDonald's, which states that:
McDonald's vision is to be the world's best Customer Satisfaction: Satisfying internal and
quick service restaurant experience. Being external customers are the focus of
the best means providing outstanding quality, everything we do.
service, cleanliness and value, so that we Continuous Improvement: Continuous
make every customer in every restaurant improvement is how we think; Innovative
smile. To achieve our vision, we are focused change provides competitive opportunities.
on three world-wide strategies, to be the best
employer in each community around the Community Involvement: Giving back is our
world, deliver the operational excellence to heritage. We actively participate and invest
each customer in each of our restaurants, and in the communities where we do business.
to achieve enduring profitable growth. Commitment to Stakeholders: We serve all
stakeholders and, through balancing our
Drucker's (1973) question, ``What is our
responsibilities to all, we maximize value to
business for?'' is largely synonymous with
each of them.
the question, ``What is our mission?'' David
(1993) defines the mission statements as: If the core ideology of Wendy's is identified
The enduring statements of the purpose that through the list, what does the list represent?
distinguishes one business from another Mintzberg and Quinn (1996) explain the core
similar firm ± and identifies the scope of the ideology as a rich system of values and
firm's operations in terms of products and beliefs about an organization, shared by its
markets.
members, that distinguishes it from other
This definition contains the elements that organizations. They referred to the
the managers of Hilton believe distinguish organizations with core ideology as
it from other businesses, and it identifies ``stylistically rich organizations'', as their
the scope of the company in terms of beliefs have a quasi-religious value.
products and markets. Campbell and Campbell and Tawadey (1992) explain that
Tawadey (1992) argued that the mission mission is made real only when it affects the
statements include the broader elements behaviour and guides the peoples' actions.
like purpose, strategy, value and They go on to argue that strategy contains
behavioural standards. the message about what should be achieved;
Company values, as defined by Raynor for example, low cost production and
(1998), are the principles to which the excellent service contain the message about
company should align all actions and are how things should be done. The synergy
essential and enduring tenets. Collin and results in the strong behavioural standards,
Porras (1996) explained that company values which are organizations' rule of the thumb
are a small set of general and guiding ``the way we do things around here''. This
[ 256 ]
Tahir Sufi and Howard Lyons forms the platform for the culture that managers to discuss their differences and
Mission statements exposed Hofstede (1980) describes as the collective bring out a common view. Klemm et al. (1991)
International Journal of mental programming, which is the property shared the view and explained that there are
Contemporary Hospitality of a group, not of the individuals, although it two simple views on the purpose of the
Management
15/5 [2003] 255-262 is the individuals who carry it. This sense of mission statements. Either they are for
belonging is, in itself, a powerful source of external public relations or internally
motivation for employees. focused to motivate staff. They also noted
Peters and Waterman (1982) explained that that mission statements could be an assertion
the sense of belonging, itself a source of the of leadership.
motivation for employees, is the result of the Mission statements can serve as an
shared ideology, which drives behaviour. important tool for communication within the
They describe successful organizations as organization (for employees) and outside the
those where people are driven by a sense of organization (investors, etc.). Bartkus et al.
excitement, with a strong feeling of belonging (2000) come to a conclusion that the best
to the organization. This feeling of belonging mission statements are those which are
and the sense of excitement are emphasised communication tools and which simply
in the mission statement of Ritz Carlton, define the company business and suggest a
which contains a unique blend of strategy future goal.
and values:
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We will always select employees who share


our values. We will strive to meet individual Components of mission
needs because our success depends on the
statements
satisfaction, effort and commitment of each
employee. Our leaders will constantly Many organizations define their reason for
support and energise all the employees to existence in terms of their mission
continuously improve productivity and statements, providing a statement to
customer satisfaction. This will be stake holders of what the company stands for,
accomplished by creating an environment of its purpose, image and character. Jauch and
genuine trust, respect, fairness, and Glueck (1988) explained that mission
teamwork through training, education,
statements could be of varying length, format
empowerment, participation, recognition,
rewards, and career opportunities.
and content. Total Research, Strategic
Marketing Services (1999) indicates that
If this Ritz Carlton mission statement mission statements range from seven to 1,000
contains a mixture of values as well as words. The longest mission statement in this
strategy, it is useful to see where mission study belongs to Ritz Carlton, 365 words, and
statements fit in with regard to perceived the shortest was CBRL ``pleasing people''.
purpose and actual impact. Table I shows the list of components of
mission statements thought to be important
by the different researchers.
The impact and the purpose of Fred (1996) indicated that practitioners
mission statements consider an effective mission statement to
contain the following:
There is thought to be evidence for the . Who are the firm's customers?
contribution of mission statements to . What are the firm's major products or
business success. Being a starting point for
services?
developing organizational strategy, mission . Where does the firm compete?
statements have been widely adopted by most . Is technology a primary concern of the
companies. Bart et al. (2001) studied the
firm?
relationship between mission and . Is the firm committed to economic
organization performance. They found that
objectives of survival, growth, and
mission statements could affect the financial
profitability?
performance. Several mediating elements, . What are the basic beliefs, values,
including commitment to mission, and the
aspirations, and philosophical priorities
degree to which the organization aligns its
of the firm?
internal structure, policies and procedures . What is the firm's distinctive competence
were important. These variables are found to
or major competitive advantage?
be positively and directly associated with . Is the firm responsive to social,
employee behaviour.
community, and environmental concerns?
Germain and Cooper (1990) concluded that . Are employees considered to be a valuable
customer service mission statements are
asset for the firm?
effective in sensitising all employees.
Campbell (1997) indicated that mission Lynch (2000) explained that since no two
statements could be useful for getting senior organizations are the same in terms of the
[ 257 ]
Tahir Sufi and Howard Lyons Table I
Mission statements exposed Components of mission statements
International Journal of
Contemporary Hospitality Abell (1980) Satisfied customer group, satisfied needs, how the needs are satisfied
Management
15/5 [2003] 255-262 McGinnis (1981) Define organization, organizational aims, flexible, should evaluate current and
prospective activities, clearly interpreted
Pearce (1982) Target customer, market, products and services, geographical domain, core technology,
survival, growth, profitability, company philosophy, self-concept, public image
Ackoff (1986) Goals, differentiation factors, organizational aspirations, role of all the stakeholder
groups
Want (1986) Purpose, business aims, corporate identity, company policies, and values
Campbell and Customers, products/service, lcation, technology, concern for survival, philosophy,
Tawadey (1992) self-concept, public image, employees
Fred (1996) Customers, products, markets, technology, survival, growth, profitability, philosophy
Total Research, Customer care/focus, products and service quality, leadership, competitiveness,
Strategic Marketing innovation, staff focus, social responsibility and shareholder value
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Services (1999)
Lynch (2000) Specific, distinctive, realistic/attainable, and flexible
Frequent attributes Customers, product/service, technology, market, survival, growth, profitability,
company philosophy, differentiation factors, image, values, leadership, stakeholders,
clarity and social responsibility

ownership, resources, or environmental stressed in the academic literature and also


circumstances, the mission statements are in actual mission statements.
personal to each organization. He suggested
that the criteria for judging the mission
statements should be specific, distinctive, Methodology
realistic, attainable and flexible. The A total of 30 mission statements from the
contents of mission statements as explained largest hospitality firms were analysed. The
by Want (1986) are purpose, principal list of firms was compiled from Dun and
business aims, corporate identity, policies of Bradstreet (2000) Industry Handbook. The
the company and corporate values. Pearce companies chosen were publicly quoted.
(1982) identified the foci of mission These firms represent about 200 of the largest
statements, which include, target customer, brands, as most large firms operate several
markets, principal, products/services, brands in food service or hotels. Where
geographical domain, core technology, individual brands have their own mission
commitment to survival, growth, statements, they are typically derivative
profitability, company philosophy, from the mission statement of the company.
self-concept, and public image. Using publicly quoted corporations
Abell (1980) suggested that the question facilitated access to financial data used in the
``What is our business?'' could be answered in correlation with the mission statement
terms of three dimensions: scores. Flamholtz and Zeynep (2000) used the
1 ``What are the customer groups that are return on shareholders' equity as the
being satisfied?''; performance measurement tool to test
2 ``What needs are being satisfied?''; and organizational success and failure. The
3 ``How are the needs being satisfied?'' return on equity measure in this study was
justified on the basis of evidence available in
From the literature, the components of the the literature. Titelbaum (1996) and Eiseman
mission statements, which are agreed upon (1997) consider return on equity as a good
by most of the writers are: concern for the measure for assessing the overall
customers, purpose, identity/image, performance of the firm and the performance
differentiation factors, corporate values, of the firm's management as well. Wheelan
products, markets, and concern for the and Hunger (2000) explain that financial
survival, growth, profitability, company ratios such as return on equity, overall
philosophy and employee and social concern. turnover sales and profit margin are
Of all these components, the primary seems fundamental when analysing corporate
to be ``customer oriented'', which has been financial accounts. Financial performance of
[ 258 ]
Tahir Sufi and Howard Lyons the companies in this study is compared with Therefore a one tailed test was the
Mission statements exposed their mission statement scores, using appropriate test of significance.
International Journal of correlation analysis. The components of the The correlation analysis between the
Contemporary Hospitality mission statements that were identified from mission statement score and the performance
Management
15/5 [2003] 255-262 the literature review on the basis of being indicators indicated no particular
discussed frequently and considered correlation with the return on equity and net
important in the academic literature are: profit margin. In both cases the significance
1 Whether the mission statement defines of the correlation coefficient is not near to
the company business. zero (p < 0.001) or fluke, which could have
2 Communication about where the established any correlation. The significance
company is and where it is heading. of the probability in both the cases is much
3 Whether the mission statement carries greater (p > 0.001). Thus no correlation of the
the concern for customers. mission statement score could be established
4 Whether the mission statement carries with either of these performance indicators.
the concern for employees as well. The mission statement score showed
5 The philosophy about which all the significant correlation with the annual
employees feel proud. turnover of the companies (see Table II). The
6 The firm's concern for surviving and correlation coefficient in this case is
growth. (r = 0.388) and the significance of this
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7 Desire to be the jewel in the industry and


probability is less than 0.05 which is the
society as well.
acceptable probability value for social
8 The firm's concern for product/service
scientists. In this case p = 0.041 is much less
quality and innovation.
than the acceptable value, p < 0.05. This
9 Markets where the company competes.
establishes the positive correlation between
10 What are the firm's major sources of
the mission statement score and annual
competitive advantage?
turnover of the companies.
In this study mission statements were scored The content analysis of the mission
on the basis of the presence of these ten statements generated showed that the
components. For each component available majority of companies focus on customers
in the (real or proxy) company mission and communication. This reflects the
statement, a score of one mark was given. strategic management literature as well. The
The total score of a mission statement was concern for survival is demonstrated by the
calculated as a mark out of ten. The score of 86 per cent of companies which identify the
the mission statement determined a measure factor. Businesses do not exist for profit
of the ``quality'' of the mission statement. The making only; the main objective of survival
possible correlations between the quality of is reflected in Drucker's theory of business
mission statement and the firm's purposes.
performance on the basis of its return of Firms are concerned with ``company
equity, net profit margin and annual values'' and these may be present in more
turnover were computed. than component 4, in Table III. A mission
statement may define the behavioural
standards of the company. The mission
Statistical results of the survey statements can seek to tune the personal
The correlation analysis of the data values of all employees to that of the
(Pearson's product moment ± one tail) company.
between the mission statement score and the Employee care is another dimension,
performance indicators was computed using which the mission statements touch.
SPSS software. Possible relationships Significant numbers of companies aim to
between the various variables, i.e. mission care for their employees, and this is
statement score and performance indicators reflected in the content analysis of the
(return on equity, net profit return and mission statements. Mission statements
annual turnover), were tested with bivariate were also seen to emphasise a concern for
correlation. The correlation between the quality and innovation.
mission statement score and performance Over half of mission statements failed to
indicators was carried out on a one to one include the means of achieving goals and
basis. As the data are parametric, Pearson's location in which market the business is
product-moment correlation coefficient was going to compete. However this does not
used. From the literature review we mean that these firms do not have the
developed the hypothesis that the mission strategic direction. This may be a deficiency
statements have a direct and positive impact in the mission statements rather than the
on the performance of the business. strategic direction of the companies.
[ 259 ]
Tahir Sufi and Howard Lyons Table II
Mission statements exposed Correlation between mission statement scores and performance indicators
International Journal of
Contemporary Hospitality Return on Return on Net profit Annual
Management equity ± TTM equity margin turnover
15/5 [2003] 255-262
Mission statement Pearson correlation score 0.198 ±0.063 0.356 0.388
Significance (one-tailed) 0.208 0.397 0.057 0.041
n 30 30 30 30

23 treat each other with respect and dignity;


Table III
24 embrace diversity;
The frequency of occurrence of the key
25 contribute positively to customers;
mission statement components in the study
26 environmental responsibility;
Component Frequency (per cent) 27 provide a memorable experience; and
1. Customer focus 95 28 easiest company to do business with.
2. Communication 90 This list of 28 variables highlights a problem
3. Survival 86 of design. It is too easy to construct a
4. Values 86 good-looking mission statement from this
5. Employee care 76
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heterogeneous list, yet real commitment to a


6. Quality/innovation 71 component is not always easy to achieve.
7. Public image 67 There is a hierarchy of components, some of
8. Business 62 which relate to overall business activities
9. Location 43 and others which pragmatically relate to
10. Self-concept 33 particular business functions.
Although the list of 28 components may
bear further scrutiny, one contribution of
So far the discussion has related to this research is that we have identified
correlations and quantitative measures, next elements that hospitality enterprises have
we will consider the messages contained in included in mission statements. This list may
the analysis of the content of mission be of value to other researchers seeking
statements. either to analyse mission statements, or to
practitioners seeking to construct a company
mission statement.
Mission statement contents Mission statements are said to be a very
The descriptive list of the components of the important part of strategic and corporate
mission statements of the hospitality firms planning. However, it appears that it is only
was prepared. A total of 28 components were the big hospitality companies which possess
identified: the higher scoring mission statements. So
1 best company; far as business performance and
2 best provider of customer service; effectiveness is considered the companies
3 best employer; with the better mission statements do not
4 deliverer of operational excellence; necessarily perform better. However, as the
5 achiever profitable growth; literature suggests there is a strong indirect
6 investor in technology and innovation; influence of the mission statements on the
7 seeker of new markets; business performance. They are effective
8 strengthen the brand; because of their unique ability to motivate
9 exceed the expectations; the employees who share the same set of
10 empower through training and values as suggested in the mission
accountability; statements. The necessity of having good
11 improve the balanced scorecard; mission statements arises from the fact that
12 recognise the values; they are powerful communication tools. The
13 quality leader; interests of investors, customers,
14 use freshly made products; employees, suppliers and strategic partners
15 achieve consistent excellence; are linked with those of the company. A
16 satisfy internal and external customers; good mission statement can provide an
17 serve all the stakeholders; assurance to all these stakeholders that the
18 maximise the value of each shareholder; company is considering their interests. This
19 build on the strengths; is what makes a mission statement an
20 enrich the lifestyles; effective tool for the corporate
21 anticipate the needs; communication, which is vital for the
22 provide a great work environment; success of any business.
[ 260 ]
Tahir Sufi and Howard Lyons Collins, J. and Porras, J.I. (1996), Built To Last,
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Management managers improve the company mission
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pp. 238-49.
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Responsibilities and Practices, Harper and
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