An Analysis of the Mission Statements of Selected Bangladeshi Companies-libre

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  Journal of Business Administration, vol. 6, 2004 An Analysis of the Mission Statements of Selected Bangladeshi Companies Dewan Mahboob Hossain *  Abstract:  This study focuses on the mission statements of Bangladeshi companies. Fifteen companies were selected through convenient sampling and the characteristics of their mission statements were evaluated according to the criteria given by Fred R. David. By evaluating these mission statements a conclusion was drawn that the Bangladeshi companies are preparing their mission statements without knowing the basic characteristics that mission statements should possess. 1. Corporate Mission According to Peter Drucker (1973), A business is not defined by its name, statues, or articles of incorporation. It is defined by the business mission. Only a clear definition of mission and purpose of the organization makes possible clear and realistic business objectives. The mission of an organization defines its business. For example, a food manufacturing company's mission is to produce food products, a petroleum company's mission is to supply fuel in the market, a university's mission is to provide tertiary level education to its students and a software company's mission is to make software. Peter Drucker says, asking the question What is our business? is similar to asking the question What is our mission? But there are some people who think that the definition of mission should not be that simple. It should contain some other components that will be acting as guidelines for 'strategic management'. Defining a clear mission for the business is very important for setting future strategies of the business. Campbell, Devine and Young (1993), in their famous book called 'A Sense of Mission' has quoted from the speech of Colin Marshall (Deputy Chairman, British Airways) that, A corporate mission is much more than good intentions and fine ideas. It represents the framework for the entire business, the values which drive the company and the belief that the company has in itself and what it can achieve. Setting a clear and well-defined mission is the very first step of strategic management (David, 1999). Through defining the business, the mission helps to set the long-term objectives of an organization and basing on those long-term objectives, strategies can be set. Different schools of thought have defined mission in different ways. Some of them described mission as a 'strategic tool' and some of them argued that mission should be stated in terms of 'philosophy and ethics' (Campbell, et al, ___________________ * Lecturer, Department of Accounting and Information Systems, Faculty of Business Studies, University of Dhaka, Bangladesh. This article is brought to you by  2 An Analysis of the Mission Statements of Selected Bangladeshi Companies 1993). If both of these thoughts are analyzed, it becomes conspicuous that the first school of thought (defining mission as a strategic tool) is more concerned with the 'survival' of an organization as a 'business concern' and the second school of thought (defining mission in terms of philosophy and ethics) is more concerned with seeing the organization as a 'social unit' and thus they dealt with social emotions. There is no doubt that each of these views has its own importance. The world of business is becoming more and more competitive and in order to survive in this competitive environment, proper strategic management is very important. As a 'strategic tool', a mission can help in this purpose. On the other hand, it is also true that modern society presents business with immensely complicated problems it did not have formerly (Davis, 1975). There is no doubt that business is a social unit and in order to exist and survive in the society it has to respect the ethical values of the society. It is said that, today a business lives in a 'Glass House' and that is why business has greater 'Public Visibility' (The extent that an organization's activities are known to persons outside the organization) in comparison to other institutions in the society (Davis, 1975). Society is very much alert to know the activities of the business. The growing popularity of 'social welfare' is also compelling the business to perform some social responsibilities. The concept of 'Corporate Social Responsibility (CSR)' is a burning question in today's world. So, as these both views are very important, it is better to set a corporate mission incorporating both these issues and that will help the organization to set proper goals and then set the strategies according to those goals. Campbell, et al (1993) suggested that a mission should have the following four components: 1. Purpose: Why the company exists? 2. Strategy: The competitive position and distinctive competence. 3. Standards and Behaviors: The policies and behavior patterns that underpin the distinctive competence and the value system. 4. Values: What the company believes in. The mission of the company should be well communicated to the stakeholders of the company and the medium of this communication is a 'mission statement'. 2. Mission Statement: A mission statement is a clearly written statement that communicates about the mission of the organization to several parties related to that particular organization. These parties include employees, strategists, customers, investors and others who have any relationship with the affairs of the organization. A clear mission statement is essential in order to establish effective objectives and  Journal of Business Research, Vol. 6, 2004 3 to formulate strategies (David, 1999). Mission statements can be communicated through several media like the annual reports of the company, several internal reports, leaflets etc. An example of a mission statement is given in Appendix-2. According to McGinnis (1981), a mission statement 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 framework for evaluating both current and prospective activities, and 5. Be stated in terms of sufficiently clear to be widely understood throughout the organization. There is no particular length or format of a mission statement. It differs from organization to organization. It can also be said that there is no specificity about the components of the mission statements. Several authors have identified several different numbers of components that should be present in a 'good mission statement'. Components of mission statements suggested by Fred R. David: Though David (1999) admits that mission statements can differ in length, content, format and specificity, he suggested the following components to be present in a mission statement: 1. Customers: Who are the firm's customers? 2. Products or services: What are the firm's major products and 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 distinct competence or major competitive advantage? 8. Concern for public image: Is the firm responsive to social community and environmental concern?  4 An Analysis of the Mission Statements of Selected Bangladeshi Companies 9. Concern for employees: Are employees valuable assets of the firm? It is very much visible that in his suggested 'mission statement components', David tried to cover both the views of considering mission statement as a 'strategic tool' and including 'ethics and philosophies' in it. 3. Objective and Methodology of the Study The objective of this study is to identify whether the mission statements of Bangladeshi companies contain these components suggested by David. David's components were selected as a standard as these components include both 'strategic' and 'ethical' views. In order to assess the mission statements of Bangladeshi companies, 15 companies were taken as a sample through convenient sampling. Actually, 63 annual reports of different companies were collected and out of which in 15 annual reports, mission statements were found. Then the mission statement of each of these companies was analyzed in order to identify whether it covers the several components of mission statements suggested by Fred R. David. This analysis was done through a table shown in Appendix -1. Findings: According to the criteria suggested by Fred R. David, the following are the findings: 1. Customers:  Only 2 companies out of these 15 companies (13.33%) have mentioned about their customers in the mission statement. But one of them could not define its customers specifically in their mission statements. For example, the mission statement of The City Bank Limited is: To enjoy the trust and confidence of customers through cultivation of relationship banking . In this particular statement, they have just mentioned about their customers and did not define who are they. But the other company, Uttara Finance and Investment Limited could define their customers specifically To provide lease finance to professionals and technicians on attractive terms . 2. Products or Services:  Four companies (26.67%) mentioned about their product or services in the mission statements. These companies mentioned their products or services specifically. We can take two examples among these companies: Anlima Yarn Dying Limited and Uttara Finance and Investment Limited: Anlima Yarn Dying Limited To strive hard to be a provider of world class textile and garment   products and services ...... .
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