Organization Vision and Mission Statement
What is the Organizational Mission?
A mission statement identifies the scope of a firm’s operations in product and market terms. It answers the question ―what is our business? A mission is the organization’s reason to be or reason for existence. A mission can be described as the invisible hand ‘guiding widely dispersed employees to work independently and collectively towards realizing the organization’s goals. In essence, it gives the scope of operation of an organization and broadly charts the organization’s future direction.
Components of a Good Mission Statement
A good mission statement should show the firms:
(i) Major customer: It must indicate who the firm targets its products at.
(iii) Technology (mode of production) – must show whether technology is of major concern to the organization.
It must also show the firm’s significant concerns or philosophies e.g.
- Commitment to quality
- Concern for growth
- Concern for public image
- Concern for employees
Benefits of a Mission Statement
The mission statement clearly defines the following:
- The overall company vision.
- Fundamental values that managers must adhere to that is it represents the organizational culture.
- Key goals and objectives, which must be attained.
- Customers to serve and boundaries of operations.
- Customers need to be satisfied.
- Product and service benefits to satisfy customers.
- Technologies by which needs can be satisfied.
- Specification on how the company intends to incorporate its stakeholder’s rights and claims into its strategic decision-making to maximize the stakeholders’ wealth.
The stakeholders include customers, shareholders, suppliers, and employees.
An objective is a target that must be reached if the organization is to achieve its goals. Objectives are the translations of the mission into specific concrete terms against which results can be achieved. Corporate objectives specify what the organization is meant to accomplish. Each objective should answer three questions:
- What is to be accomplished?
- How much is to be accomplished?
- When is it to be accomplished?
Objectives can be short term, especially when they are expressed in terms of targets to be achieved by a specified date. There can also be long term objectives which could be described as accountabilities for achieving results that are built into the role definition as key result areas. It be expressed in unquantifiable terms, e.g., a long term objective may be to maintain high levels of customer service, but a short term objective could be to reduce to within a specified length of time the period between a customer inquiry and the response to it.
Characteristics of Good Objectives
Good objectives are:
- Consistent with the values of the organization and departmental and organizational objectives.
- Precise: clear and well-defined using positive words.
- Challenging: to stimulate high standards of performance and to encourage progress.
- Measurable: they can be related to quantified or qualitative performance measures.
- Achievable within the capabilities of the individual.
- Agreed by the manager and the individual concerned.
- Time-related: achievable within a defined timescale.
- Focused on teamwork with an emphasis on the need to work as an effective member of a team as well as making individual achievement.
Many organizations use the SMART ‘mnemonic to summarize the characteristics of good objectives.
- S = Specific: clear, unambiguous, understandable, and challenging.
- M = Measurable: quantity, time, money, verifiable.
- A = Achievable: challenging, but within reach of a competent and committed person.
- R = Relevant: relevant to objectives of the organization, so that goal of the Individual goods is aligned to corporate goals.
- T = Time-framed: to be completed within an agreed timetable
Management By Objectives (MBO)
Management By Objectives (MBO) is a comprehensive managerial system that systematically integrates many key managerial activities and is consciously directed towards the effective and efficient achievement of organizational and individual objectives. It is a philosophy of management that encourages mutual goal setting between superiors and subordinates.
How Management By Objectives Works
Although there are a number of variations, MBO generally consists of these steps: setting organizational objectives, setting individual objectives, and appraising according to results.
These steps involve:
- The manager will explain the rationale and methodology of MBO to subordinates to enhance its acceptance.
- Top management determines the overall objectives of the organization and for each department.
- A key manager will be identified from each unit who, together with top management, will design a unit improvement plan. This sets out the units’ objectives and how these will be achieved.
- A personal job improvement plan will also be developed with each unit manager. This links the unit objectives and the manager’s personal objectives.
- The unit managers then meet subordinates to explain to them what is expected in their departments. Both parties come up with individual objectives for the coming period, which is usually a year or less. These individual objectives must be linked to those of the department. An action plan is developed to see how these objectives will be achieved.
- The manager does intermediate reviews to see if the subordinate is working effectively towards the set objective. Areas of deviation are identified and set right.
- At the end of the set period, a final review is conducted, and corrective measures are taken. If an employee has met his target, he is rewarded.
Guidelines in Implementing Management By Objectives
To ensure the success of an MBO program in any organization, top management must ensure:
- Consistency between units individual and corporate objectives.
- The right climate and culture to ensure that the organization is committed.
- Focus on critical areas of improvement.
- Assign responsibility to specific managers to enhance control.
- Avoid duplication of control work.
- Have an efficient MIS. (Management Information System).
- Provide managers with flexibility and freedom.
- Provide training.
- Provide adequate time and resources.
Management by Objectives Advantages and Disadvantages
Advantages of Management By Objectives (MBO)
- It facilitates control.
- It encourages a results-oriented culture.
- With MBO, organizational goals are clearer and verifiable.
- MBO leads to carefully coordinated planning since it is participatory in nature.
- Better objectives are formulated.
- It leads to improved performance and better motivation.
- MBO leads to enhanced manager development.
- MBO improves commitment and delegation.
- MBO improves communication.
Disadvantages of Management By Objectives (MBO)
- MBO lays too much emphasis on short-term goals.
- It lays too much emphasis on quantitative goals as opposed to qualitative ones, e.g., product appeal.
- It is very time consuming and increases paperwork.
- MBO is also very rigid (the environment of management usually is very dynamic.
- It assumes managers have the right skills and attitude towards MBO.
- MBO is resented by subordinates who do not wish to participate in the goal-setting process.
- It is pressure oriented.
- MBO assumes there will be no conflicts in the objectives of the organization and those of individuals. Even when there are conflicts, MBO assumes they can easily be solved.