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CHAPTER 2 • THE BUSINESS VISION AND MISSION 47

formulation, implementation, and evaluation activities. Thus, the process of developing a
vision and mission statement represents a great opportunity for strategists to obtain needed
support from all managers in the firm.
During the process of developing vision and mission statements, some organiza-
tions use discussion groups of managers to develop and modify existing statements.
Some organizations hire an outside consultant or facilitator to manage the process
and help draft the language. Sometimes an outside person with expertise in developing
such statements, who has unbiased views, can manage the process more effectively
than an internal group or committee of managers. Decisions on how best to com-
municate the vision and mission to all managers, employees, and external con-
stituencies of an organization are needed when the documents are in final form. Some
organizations even develop a videotape to explain the statements, and how they were
developed.
An article by Campbell and Yeung emphasizes that the process of developing a
mission statement should create an “emotional bond” and “sense of mission” between the
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organization and its employees. Commitment to a company’s strategy and intellectual
agreement on the strategies to be pursued do not necessarily translate into an emotional
bond; hence, strategies that have been formulated may not be implemented. These
researchers stress that an emotional bond comes when an individual personally identifies
with the underlying values and behavior of a firm, thus turning intellectual agreement and
commitment to strategy into a sense of mission. Campbell and Yeung also differentiate
between the terms vision and mission, saying that vision is “a possible and desirable future
state of an organization” that includes specific goals, whereas mission is more associated
with behavior and the present.

Importance (Benefits) of Vision and Mission
Statements

The importance (benefits) of vision and mission statements to effective strategic
management is well documented in the literature, although research results are mixed.
Rarick and Vitton found that firms with a formalized mission statement have twice the
average return on shareholders’ equity than those firms without a formalized mission
statement have; Bart and Baetz found a positive relationship between mission state-
ments and organizational performance; BusinessWeek reports that firms using mission
statements have a 30 percent higher return on certain financial measures than those
without such statements; however, some studies have found that having a mission state-
6
ment does not directly contribute positively to financial performance. The extent of
manager and employee involvement in developing vision and mission statements can
make a difference in business success. This chapter provides guidelines for developing
these important documents. In actual practice, wide variations exist in the nature,
composition, and use of both vision and mission statements. King and Cleland recom-
mend that organizations carefully develop a written mission statement in order to reap
the following benefits:

1. To ensure unanimity of purpose within the organization
2. To provide a basis, or standard, for allocating organizational resources
3. To establish a general tone or organizational climate
4. To serve as a focal point for individuals to identify with the organization’s purpose
and direction, and to deter those who cannot from participating further in the orga-
nization’s activities
5. To facilitate the translation of objectives into a work structure involving the assign-
ment of tasks to responsible elements within the organization
6. To specify organizational purposes and then to translate these purposes into objec-
tives in such a way that cost, time, and performance parameters can be assessed and
controlled. 7