Content area
Full text
Challenges of successful reform: an international perspective
Edited by Farhan Analoui
1. Introduction
This paper is based on the results of a study which examines small to medium-sized enterprises (SMEs) managers' attempts to establish a relationship between mission statements and firm performance. The data demonstrates that the existence and the content of a mission statement has implications for firm performance. First the literature on mission statements will be reviewed, covering both their role and more specifically their use in the SME sector. Then the methodology adopted for the study will be explained. Subsequently, the data analysis and major findings of the research are discussed. Finally the paper draws conclusions, leading to propositions to guide further avenues for research.
2. Literature: an overview
The relationship between a firm's mission statement and its performance has been assumed by many researchers and managers for years, but the question of whether a formal mission statement is associated with positive performance has not been extensively investigated in the literature ([3] Bart, 1998). A commonly advanced view is that a firm's mission statement is an enduring statement of purpose that distinguishes its business from its peer firms, identifies its scope of operations, embodies its business philosophy and reflects the image it seeks to project ([19] Toftoy and Chatterjee, 2004). Therefore, writing a meaningful mission statement is an essential step in developing the firm's strategic plan. The literature on mission statements in small and medium-sized enterprises (SMEs) is both descriptive ([14] Pearce and Robinson, 1994) and prescriptive ([13] Pearce and David, 1987). A major shortcoming of the literature on mission statements is that very little is known empirically about the actual effectiveness and overall usefulness, and the relationship of mission statements to performance. Nevertheless, there is an overwhelming consensus in the literature that the development and management of business missions is fundamental for the performance of any business ([18] Smith and Fleck, 1987; [7] Falsey, 1989).
It has been argued that there are two principal benefits of having a mission:
better staff motivation towards achieving a common organisational purpose, or sense of mission ([10] Klemm et al. , 1991); and
a more focused/improved allocation of organisational resources ([5] Bart and Baetz, 1998).
It has been argued that developing a mission statement...