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1. Introduction
For two decades the performance implications of mission statements have been a central area of investigation. However, research on the relationship between mission statements and organizational performance has proved inconclusive. While some studies have found significant benefits, others have found no relationship, or even small negative effects. Hence, the question rises if developing a mission statement is a worthwhile effort.
The paper at hand addresses this issue by systematically reviewing the literature examining the mission statement-financial performance relationship and analyzing the strength of the cited relationship by means of meta-analyses.
2. The performance impact of mission statements
As a formal document that articulates an organization's distinct and enduring purpose, mission statements have become one of the most popular and widespread management tools (2009). Some authors even state that mission statements appear to have evolved into a prerequisite of doing business ([40] Smith et al. , 2001).
The key to this popularity most probably lies in a myriad mutually reinforcing factors. One essential element, however, is the growing body of literature offering validity to the assumption that developing a mission statement generates organizational benefits which should ultimately result in improved (financial) performance ([3] Atrill et al. , 2005; [10] Bart and Baetz, 1998; [12] Bart et al. , 2001). Frequently cited benefits include:
- Providing a sense of the organization's direction and purpose . Mission statements are the starting point of every strategic initiative. Only a clear definition of an organization's purpose makes it possible to formulate realistic and coherent goals ([12] Bart et al. , 2001), and to choose between strategies ([24] Kemp and Dwyer, 2003).
- Focusing the allocation of organizational resources . By providing a common direction that transcends individual, departmental and transitory needs, the mission statement acts as a strategic framework for allocating organizational resources ([16] Bartkus et al. , 2000) and will facilitate organizational decision-making processes.
- Communicating effectively with important internal and external stakeholders. The mission statement can be an effective vehicle for communicating with internal and external stakeholders ([16] Bartkus et al. , 2000). By clarifying the organization's goals, the organization can persuade stakeholders to provide the essential (tangible or intangible) resources needed to sustain her activities ([36] Sanchez and Heene, 2004).
- Describing the values of...