Elements of a Mission Statement and its importance In Strategic Management

“A business is not defined by its name, statutes, or articles of incorporation. It is defined by the business mission. Only a clear definition of the mission and purpose of the organization makes possible clear and realistic business objectives.” —Peter Drucker


Drucker says that asking the question “What is our business?” is synonymous with asking the question “What is our mission?”

Mission statements are enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firm’s operations in product and market terms. The mission statement should guide the actions of the organization, spell out its overall goal, provide a path, and guide decision-making. It provides “the framework or context within which the company’s strategies are formulated.”

Sometimes called a creed statement, a statement of purpose, a statement of philosophy, a statement of beliefs, a statement of business principles, or a statement “defining our business,” a mission statement reveals what an organization wants to be and whom it wants to serve.

Elements of a mission statement

Effective mission statements start by effectively articulating the organization’s purpose, or reason for existing.

According to Chris Bart, the commercial mission statement consists of 3 essential components:

  • Key market – who is your target client/customer? (generalize if needed)
  • Contribution – what product or service do you provide to that client?
  • Distinction – what makes your product or service unique, so that the client would choose you?

Examples of Elements of a mission statement that clearly include the 3 essential components:

  • McDonalds – “To provide the fast food customer food prepared in the same high-quality manner world-wide that is tasty, reasonably-priced & delivered consistently in a low-key décor and friendly atmosphere.”[
  • Key Market: The fast food customer world-wide
  • Contribution: tasty and reasonably-priced food prepared in a high-quality manner
  • Distinction: delivered consistently (world-wide) in a low-key décor and friendly atmosphere.
  • Courtyard by Marriott – “To provide economy and quality minded travelers with a premier, moderate priced lodging facility which is consistently perceived as clean, comfortable, well-maintained, and attractive, staffed by friendly, attentive and efficient people”
  • Key Market: economy and quality minded travelers
  • Contribution: moderate priced lodging
  • Distinction: consistently perceived as clean, comfortable, well-maintained, and attractive, staffed by friendly, attentive and efficient people.

A modern approach to the components of the mission statements reveal that it should have the following:

Mission Statement Components Mission statements can and do vary in length, content, format, and specificity. Most practitioners and academicians of strategic management feel that an effective statement should include nine components.

  1. Customers—Who are the firm’s customers?
  2. Products or services—What are the firm’s major products or services?
  3. Markets—Geographically, where does the firm compete?
  4. Technology—Is the firm technologically current?
  5. Concern for survival, growth, and profitability—Is the firm committed to growth and financial soundness?
  6. Philosophy—What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
  7. Self-concept—What is the firm’s distinctive competence or major competitive advantage?
  8. Concern for public image—Is the firm responsive to social, community, and environmental concerns?
  9. Concern for employees—Are employees a valuable asset of the firm?


  • Broad in scope; do not include monetary amounts, numbers, percentages, ratios, or objectives
  • Should be precise, distinctive and clear
  • Inspiring and broad enough to allow creative growth
  • Identify the utility of a firm’s products and distinguish the company from all others
  • Reveal that the firm is socially responsible
  • Reveal that the firm is environmentally responsible
  • Include nine components customers, products or services, markets, technology, concern for survival/growth/ profits, philosophy, self-concept, concern for public image, concern for employees
  • Reconciliatory
  • Enduring and dynamic


King and Cleland recommend 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 organization’s activities
  5. To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization
  6. To specify organizational purposes and then to translate these purposes into objectives in such a way that cost, time, and performance parameters can be assessed and controlled.

(Ref: W. R. King and D. I. Cleland, Strategic Planning and Policy (New York: Van Nostrand Reinhold, 1979): 124.)


TAJ Hotels: Embrace talent and harness expertise to leverage standards of excellence in the art of hospitality to grow our international presence, increase domestic dominance, and create value for all stakeholders.

ITC Hotels: to be recognized as the premier professional organisation providing the finest tourism, hospitality and travel related customer service in the country and thereby contributing to the achievement of the following corporate and national priorities:

Corporate: Generate adequate economic surpluses to meet expectations of all stakeholders.

National: Maximising foreign exchange earnings, development of Human Resources and employment generation.


Many organizations develop both a mission statement and a vision statement. Whereas the mission statement answers the question “What is our business?” the vision statement answers the question “What do we want to become?” Many organizations have both a mission and vision statement.

In a nutshell:

  • A mission statement concerns what an organization is all about.
  • A vision statement is what the organization wants to become.

A mission statement answers three key questions:

  • What do we do?
  • For whom do we do it?
  • What is the benefit?

A vision statement, on the other hand, describes how the future will look if the organization achieves its mission. A mission statement gives the overall purpose of an organization, while a vision statement describes a picture of the “preferred future.” A mission statement explains what the organization does, for whom and the benefit. A vision statement, on the other hand, describes how the future will look if the organization achieves its mission.


Vision statement of Shangri – La Hotels and Resorts: “To be the first choice for guests, colleagues, shareholders and business partners.”

Mission statement of Shangri – La Hotels and Resorts: “To delight our guests every time by creating engaging experiences straight from our heart.”