THE ROLE AND IMPORTANCE OF ORGANIZATIONAL PURPOSE/MISSION,

VISION, AND PHILOSOPHY/BELIEFS

INTRODUCTION

Clearly defined organizational purpose or mission, vision, philosophy, and beliefs are

well directed for long term success especially in a rapidly changing world. These purpose-

and mission-driven organizations are clear about why they exist and how they plan to achieve

their objectives. They’re well-equipped to navigate change, disruption and rising expectations

from employees, customers, partners and their communities.

Organizational purpose or mission, vision, philosophy, and beliefs are strategic

elements that, when thoughtfully developed and effectively implemented, act as a roadmap,

helping organizations stay on track and work toward achieving their ultimate goals. They

help guide decisions, inspire employees and establish longevity. 

Mission and vision both relate to an organization’s purpose and are typically

communicated in some written form. Mission and vision are statements from the organization

that answer questions about who we are, what we value, and where we are going. A study by

the consulting firm Bain and Company reports that 90% of the 500 firms surveyed issue some

form of mission and vision statements (Bart & Baetz, 1998). Moreover, firms with clearly

communicated, widely understood, and collectively shared mission and vision have been

shown to perform better than those without them, with the caveat that they related to

effectiveness only when strategy and goals and objectives were aligned with them as well

(Bart, et. al., 2001).

Objectives

This topic aims to:

1. Define organizational purpose and mission, vision, philosophy and beliefs;

2. Discuss the role and importance of organizational purpose, mission, vision,

philosophy and beliefs; and

3. Learn considerations in developing organizational purpose or mission, vision,

philosophy and beliefs.

ORGANIZATIONAL PURPOSE OR MISSION STATEMENT

Mission and purpose are used interchangeably, though at theoretical level, there is a

difference between two. Mission has external orientation and relates the organization to the

society in which it operates. A mission statement helps the organization to link its activities to

the needs of the society and legitimize its existence. Purpose is also externally focused but it

relates to that segment of the society to which it serves; it defines the business which the

institution will undertake.

The mission statement defines an organization’s purpose or reason for being. It guides

the day-to-day operations of the organizations, communicates to external stakeholders the

core solutions the organization provides in society and motivates employees toward a

common near-to-medium term goal. In short, mission statement paints a picture of who the

company is and what the company does.

A Mission Statement also defines the organization's primary objectives. Its prime

function is internal – to define the key measure or measures of the organization’s success –

and its prime audience is the leadership team and stockholders. Mission statements are the

starting points of an organisation’s strategic planning and goal setting process. They focus
attention and assure that internal and external stakeholders understand what the organization

is attempting to accomplish.

A good mission statement focus on what is important to the organization. It should be

brief, clear, informative, simple and direct. It should avoid elaborate language, clichés, and

generalizations. It should emphasize outcomes and the people the organization is serving.

Purpose and mission serve the same role for organizations but are achieved in different

ways and have different impacts. Purpose and mission are an organization’s reason for being

and guide decision-making.

Dimensions of a Mission Statement

According to Bart (1997), the strongest organizational impact occurs when mission

statements contain 7 essential dimensions:

1. Key values and beliefs

2. Distinctive competence

3. Desired competitive position

4. Competitive strategy

5. Compelling goal/vision

6. Specific customers served and products or services offered

7. Concern for satisfying multiple stakeholders

According to Vern McGinis, a mission should:

(1) define what the organization is and what the organization aspires to be

(2) be limited enough to exclude some ventures and broad enough to allow for

creative growth

(3) distinguish a given organization from all others

(4) serve as a frame work for evaluating both current and prospective activities
 (5) be stated in terms sufficiently clear and be widely understood throughout the

organization

Developing a Mission Statement

Structure of a mission statement. The following elements can be included in a mission

statement. Their sequence can be different. It is important, however, that some elements

supporting the accomplishment of the mission be present and not just the mission as a wish or

dream.

 Purpose and values of the organization (products or services, market) or who

are the organization's primary "clients" (stakeholders)

 What are the responsibilities of the organization towards these "clients"

 What are the main objectives supporting the company in accomplishing its

mission

A mission statement explains the company’s core purpose and values:

1. At its most basic, the mission statement describes the overall purpose of the

organization.

2. If the organization elects to develop a vision statement before developing the

mission statement, ask “Why does the image, the vision exist -- what is its

purpose?” This purpose is often the same as the mission.

3. Developing a mission statement can be quick culture-specific, i.e., participants may

use methods ranging from highly analytical and rational to highly creative and

divergent, e.g., focused discussions, divergent experiences around daydreams,

sharing stories, etc. Therefore, visit with the participants how they might like to

arrive at description of their organizational mission.

 4. When wording the mission statement, consider the organization's products,

services, markets, values, and concern for public image, and maybe priorities of

activities for survival.

5. Consider any changes that may be needed in wording of the mission statement

because of any new suggested strategies during a recent strategic planning process.

6. Ensure that wording of the mission is to the extent that management and employees

can infer some order of priorities in how products and services are delivered.

7. When refining the mission, a useful exercise is to add or delete a word from the

mission to realize the change in scope of the mission statement and assess how

concise is its wording.

8. Does the mission statement include sufficient description that the statement clearly

separates the mission of the organization from other organizations?

Here are simple questions to consider when writing a mission statement:

 “What do we do?” — The mission statement should clearly outline the main purpose

of the organisation, and what they do.

 “How do we do it?” — It should also mention how one plans on achieving the

mission statement.

 “Whom do we do it for?” — The audience of the mission statement should be clearly

stated within the mission statement.

 “What value are we bringing?” — The benefits and values of the mission statement

should be clearly outlined.

Examples of Organizational Mission Statement

 LinkedIn: To connect the world’s professionals to make them more

productive and successful.

 Walt Disney: To make people happy.

  Starbucks: To inspire and nurture the human spirit – one person, one cup and

one neighbourhood at a time.

 Twitter: To give everyone the power to create and share ideas and

information, instantly, without barriers

 Mary Kay Cosmetics: To solve unsolved problems innovatively.

 TripAdvisor: To help people around the world plan and have the perfect trip.

 Toyota: To produce vehicles and components of outstanding quality, using

advanced technology, continuously improving methods and environment-

friendly processes while maintaining safe working conditions.

ORGANIZATIONAL VISION STATEMENT

A vision statement is an inspirational statement of an idealistic emotional future of a

company or group. Vision describes the basic human emotion that a founder intends to be

experienced by the people the organization interacts with. The vision statement also describes

the future of the organizations. It reveals what the company aspires to be or hopes to achieve

in the long-term. The vision statement is inspirational and motivational but also provides

direction, mapping out where the organization is headed. In this regard, it serves as a guide

for choosing current and future courses of action.

Vision statements reflect the ideal image of the organization in the future. They create

a focal point for strategic planning and are time bound, with most vision statements projected

for a period of 5 to 10 years.  The vision statement communicates both the purpose and

values of the organization. For employees, it gives direction about how they are expected to

behave and inspires them to give their best. Shared with customers, it shapes customers’

understanding of why they should work with the organization.

 An effective vision statement should be concise unambiguous, futuristic, realistic,

aspirational and inspirational. It should not be generic but rather focus on outcomes specific

to the organization.

Developing a Vision Statement

1.   The vision statement includes vivid description of the organization as it effectively

carries out its operations.

2. Developing a vision statement can be quick culture-specific, i.e., participants may

use methods ranging from highly analytical and rational to highly creative and

divergent, e.g., focused discussions, divergent experiences around daydreams,

sharing stories, etc. Therefore, visit with the participants how they might like to

arrive at description of their organizational vision.

3. Developing the vision can be the most enjoyable part of planning, but the part where

time easily gets away from you.

4. Note that originally, the vision was a compelling description of the state and function

of the organization once it had implemented the strategic plan, i.e., a very attractive

image toward which the organization was attracted and guided by the strategic plan.

Recently, the vision has become more of a motivational tool, too often including

highly idealistic phrasing and activities which the organization cannot realistically

aspire.

The key questions to be considered when writing a vision statement are as follows:

1. Where are we going moving forward?

2. What do we want to achieve in the future?

3. What kind of future society do we envision?

Vision statements may fill the following functions for a company:

1. Serve as foundations for a broader strategic plan

 2. Motivate existing employees and attract potential employees by clearly

categorizing the company's goals and attracting like-minded individuals.

3. Focus company efforts and facilitate the creation of core competencies by

directing the company to only focus on strategic opportunities that advance the

company's vision.

4. Help companies differentiate from competitors.

Commonly cited traits of a vision statement include:

1. Concise: able to be easily remembered and repeated

2. Clear: defines a prime goal

3. Time horizon: defines a time horizon

4. Future-oriented: describes where the company is going rather than the current

state

5. Stable: offers a long-term perspective and is unlikely to be impacted by market or

technology changes

6. Challenging: not something that can be easily met and discarded

7. Abstract: general enough to encompass all of the organization's interests and

strategic direction

8. Inspiring: motivates employees and is something that employees view as

desirable

Examples of Organizational Vision Statement

 Department of Education: We dream of Filipinos who passionately love

their country and whose values and competencies enable them to realize their

full potential and contribute meaningfully to building the nation. As a learner-

centered public institution, the Department of Education continuously

improves itself to better serve its stakeholders.

  Habitat for Humanity: A world where everyone has a decent place to live.

 LinkedIn: Create economic opportunity for every member of the global

workforce.

 Meta: Give people the power to build community and bring the world closer

together.

 Ikea: To create better everyday life for the many people.

ORGANIZATIONAL PHILOSOPHY AND BELIEFS

The statement of philosophy is defined as an explanation of the systems of beliefs that

determine how a mission or a purpose is to be achieved. An organisation’s philosophy states

the beliefs, concepts and principles of an organization. A company philosophy is “The

way we do things around here.”

In a conventional sense, company philosophy stands for the basic beliefs

that people in the business are expected to hold and be guided by – informal

unwritten guidelines on how people should perform and conduct themselves.

From an ethical perspective, a company philosophy begins with a set of core

values. The common element is a commitment to individuals that should guide

the company in better serving their customers.

While a mission statement tells your organization’s purpose and general goals, an

organizational philosophy describes how you operate, what you offer and how you are

organized to meet your goals. The company philosophy provides a specific direction or

guiding principle for the company and should positively influence its public image. Through

the company philosophy, the self-image and fundamental principles are written down in the

form of a target state.

 A company philosophy is basically meant to show a specific direction or guiding

principle for the company and positively influence the company’s public image. Through the

company philosophy, the self-image and fundamental principles are written down in the form

of a target state. A company’s philosophy defines the mission statement, a clear vision and

company values. It should motivate employees and represent them in public.

How does Company Philosophy differ from other guidelines? It is not a

mission statement that should succinctly summarize what the company do or

aims. A philosophy should instead flesh out the mission statement.

Importance of Organizational Philosophy

A company philosophy fulfils various purposes and functions, both internally and

externally.

 Integration function. On an employee level, the company philosophy should

strengthen an employee’s feeling of belonging and increase their motivation and

commitment (corporate identity).

 Orientation function. The vision of a company philosophy can serve as

orientation for values and standards. For example, in the case of recruiting, it can

facilitate the selection of suitable employees by determining if the applicant fits

into the company philosophy. Depending on how relevant the company philosophy

is, some companies will already determine if the applicant matches their values

during the interview process.

 Coordination function. On an external level, the respective company philosophy

can positively represent the company’s public image. It offers stakeholders,

(potential) customers and opinion leaders an answer to the question: “What does

this organization stand for?”

  Decision-making function. A company philosophy can also offer a foundation for

further development and change processes, providing a framework for short-term

and long-term changes.

Formulating a Good Organizational Philosophy

An organizational philosophy should inspire “outside” and motivate “inside”. A good

organizational philosophy has the following aspects:

1. Elicits an emotional response

2. Provides a clear direction or orientation

3. Paints a picture of the future

4. Is timeless

5. Improves a current state or significantly eliminates societal pain points

Examples of Organizational Philosophy

 HP: “We have trust and respect for individuals. We focus on a high level of

achievement and contribution. We conduct our business with uncompromising

integrity. We achieve our common objectives through teamwork. We

encourage flexibility and innovation.”

 Starbucks: “We believe in hiring exceptional people who are willing to work

for excellent results. In exchange, we are committed to the development of our

good people by identifying, cultivating, training, rewarding and promoting

those individuals who are committed to moving our company forward.”

 SUMMARY

The following table summarizes the principles of organizational purpose or mission,

vision and philosophy or beliefs.

Purpose/Mission Vision Statement Philosophy/Beliefs

Statement
 communicates the purpose  provides insight into what  explanation of the systems
of the organization the company hopes to of beliefs that determine
 describes an organization’s achieve or become in the how a mission or a
core objective, usually future. purpose is to be achieved
from a social point of view  addresses the question  states the beliefs, concepts
or with emphasis on “What would we like to and principles of an
corporate social achieve together in the organization
responsibility (CSR) future?” and “Where is  expresses the thought,
 answer the questions of this organization going?” “The way we do things
“Who are we?” and “What  future-oriented declaration around here.”
does our organization of the organization’s
value?” purpose and aspirations  basic beliefs that
 communicates the  says, “based on the people in are expected
organization’s reason for organization’s purpose, to hold and be guided
being, and how it aims to this is what we want to by – informal unwritten
serve its key stakeholders become.” guidelines on how
 often longer than vision  relatively brief, future- people should perform
statements, also include a oriented statements, and
summation of the firm’s captured in a short tag line and conduct
values themselves
 describes how you operate,
what you offer and how
you are organized to meet
your goals.
 shows a specific direction
or guiding principle for the
company and positively
influence the company’s
public image
REFERENCES

Bart, C. K., & Baetz, M. C. (1998). The relationship between mission statements and firm
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Bart, C. K., Bontis, N., & Taggar, S. (2001). A model of the impact of mission statements on
firm performance. Management Decision, 39(1), 19–35.

Hull, P. (10 January 2013). Answer 4 Questions to Get a Great Mission Statement. Forbes.
Retrieved 2015-11-02

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