Effects of Vision and Mission Statement on Firms’ Survival

Effects of Vision and Mission Statement on Firms’ Survival

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Abstract on Effects of Vision and Mission Statement on Firms’ Survival

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 on Effects of Vision and Mission Statement on Firms’ Survival

INTRODUCTION

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.

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.

OBJECTIVES OF THE STUDY

The objectives of the study are:

i.       To examine the need for vision and mission statement in organization.

ii.     To assess the perception of male and female workers on effects of vision and mission statement.

iii.  To identify the survival of firms that use vision and mission statement strategy as opposed to those that do not use in the industry.

iv.  To highlight the challenges faced by the firms which practice vision and mission statement strategy.

RESEARCH QUESTIONS

i.          Is there a need for vision and mission statement in every organization?

ii.        Is there a significant difference in the perception of male and female workers on effects of vision and mission statement on firms survival?

iii.     Is there a significant difference between the survival of firms that use vision, mission statement and those that do not use?

iv.     What are the challenges faced by the firms which practice vision and mission statement strategy?

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.

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.

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.

SCOPE OF THE STUDY

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

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.

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.

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