Mission statements: in search for ameliorated performance
through organisation – employee value congruence.
Drs. Sebastian Desmidt
Prof. Dr. Aimé Heene
Department of Management and Organisation
Faculty of Economics and Business Administration
Ghent University
B-9000 Ghent
Tel. 0032 (0)9.264.34.94
Fax 0032 (0)9.264.78.88
sebastian.desmidt@UGent.be
Paper presented at the First workshop of the EGPA Study Group on
Ethics and Integrity of Governance
Mission statements: in search for ameliorated performance through
organisation – employee value congruence.
Abstract:
Over the past 20 years mission statements have become one of the most popular management
tools. Despite their enormous popularity mission statements are often, in practice as well as in
academic literature, approached with resistance, scepticism, and even cynicism.
Attitudes that are often nurtured by the vagueness that surrounds “guiding instruments” like
mission statements and the tendency by some to impute mission statements with almost
mythical powers able to resolve every organisational problem.
Nevertheless once beyond the vagueness and thick mist the academic literature seems
convinced that mission statements can produce a host of positive benefits and contribute to
uplift organisational performance (Bart, 1998, Duncan, 1994, Dunn, 1994, Ireland, 1992,
Mintzberg, 1987, Pearce II, 1987, Stone, 1996). Hereby implying a positive relation between
the implementation of a mission statement and organisational performance.
According to the psychological school mission statements provide a cultural glue of norms
and values which influence the behaviour of organisational members (Campbell, 1991,
Campbell, 1997, Coleman, 1997, Collins, 1995, Klemm, 1991, Lencioni, 2002, Leuthesser,
1997, Logan, 1984). These shared values, according to the psychological school, account for
the positive relation between the implementation of a mission statement and organisational
performance.
Based on these findings this paper wants to suggest a conceptual framework supported by
academic literature to examine the relationship between mission statement values and
organisational performance by introducing the construct “commitment” as an intermediate
variable.
Key words
Mission statement, commitment, values, sense of mission, organisational performance
2
During the last decades various changes have influenced the appearance of the public sector.
Evolving expectations of society and altering visions on public sector performance have
encumbered the public sector in general.
In order to cope with changes in the remote and operational environment of public
organisations many scholars and practitioners proposed to incorporate “proven” private sector
management tools in public sector organisations (Hood, 1991). A frequently applied (private
sector) concept to overcome an environment more and more characterized by dynamism,
complexity, diversity and even hostility is strategic management. Strategic management
fundamentally aims to set direction, to focus effort, to define the organisation and to provide
consistency (Mintzberg, 1987). According to many authors (Baetz, 1996, Bart, 1996, Pearce
II, 1982) the process of strategic management starts with crafting a mission statement. The
popularity of mission statements stems primarily from the assumed positive relation between
the formal phrasing of a mission statement and organisational performance.
But what is a mission statement? Contrary to the collective enthusiasm with which
practitioners have embraced (a recent world-wide study by Bain & Co revealed that mission
statements are the most popular management tool used by companies) mission statements, the
academic literature has not agreed on a general accepted terminology yet (Haberberg, ).
Terms such as mission statement, business mission, statement of purpose and value statement
are often used to underpin overlapping and interchangeable concepts (Schwartz, 2001). Even
if a consensus arouse about a hierarchy of terminologies, various authors often fill in the
mentioned concepts differently. Some authors even speak of a “terminological jungle”. This
Babel-like confusion roots in the fact that up till know research has focused mainly on
inductively analysing mission statements in order to develop checklists of mission statement
items or even a general mission template. As almost each researcher tried to develop a new
typology of mission statement components, rather than building on previous findings, a
considerable diversity appears to exist regarding the ideal mission statement definition (Bart,
1997). In spite of the prevailing theoretical confusion it is possible to distinguish two schools
of thought: “broadly speaking, one approach describes mission in terms of business strategy,
while the other expresses mission in terms of philosophy and ethics (Campbell, 1991)”. Ted
Levitt and Peter Drucker can be considered as the founding fathers of the strategic school of
mission. In his article “Marketing Myopia” Levitt (Levitt, 1960) proclaims that many
organisations have the wrong business definition. Managers should define more carefully
3
their business in order to focus on customer need rather than on production technology.
Accordingly Drucker (Drucker, 1974) stressed in the 1970s that business purpose and
business mission are rarely given adequate thought. Organisations often neglect to answer the
basic question: “What business are we in?” (David, 1989). Based on this “hard” approach of
the concept “mission statement” several authors defined a mission statement as a formal
document answering “some fairly basic, yet vitally important, questions: what is our purpose?
Why do we exist? What are we trying to accomplish? (Bart, 1997)”.
In contrast, the psychological or cultural school of mission statement stresses the “soft”
components that a mission statement should address. “A mission is the cultural glue which
enables an organisation to function as a collective unity. This cultural glue consists of strong
norms and values that influence the way in which people behave, how they work together and
how they pursue the goals of the organisation (Campbell, 1991)”. The underpinning element
in this approach is the importance of core values in an organisation. “Core values […] are the
organisation’s basic precepts about what is important in both business and life, how business
should be conducted, its view of humanity, its role in society, the way the world works, and
what is to be held inviolate (Collins, 1991)”.
In order to overcome the shortcomings of both schools, several authors proposed to integrate
the strategic and cultural schools of thought. Pearce and David for example stated that an
effective mission statement “defines the fundamental, unique purpose that sets a business
apart from other firms of its type and identifies the scope of the business’s operations in
product and market terms. It is an enduring statement of purpose that reveals an organisation’s
product or service, markets, customers and philosophy (Pearce II, 1987)”. Although the
“hard” components prevail, the soft component “philosophy” holds a prominent place.
One of the most respected attempts to integrate both views on an equal basis and by some
even considered as a more or less universally accepted (Chun, 2001, Hooley, 1992) set of
mission components is the Ashridge-model (Campbell, 1993, Campbell, 1992, Campbell,
1991).
According to the Ashridge-model a mission statement should consist of 4 reinforcing basic
elements: purpose, values, strategy and behaviour standards:
4
“Why the Company Exists”
PURPOSE
“The
Competitive
Position and
Distinctive
STRATEGY
VALUES
“What the
Company
Believes in”
BEHAVIOUR
STANDARDS
“The Policies and Behaviour
Patterns that Underpin the
Distinctive Competence and Value
Now that we have gained more insight into the components a mission statement should
preferably encompass, raises the simple question raises: “Why?”
Why do so many practitioners as well as scholars devote precious resources to developing
and/or studying mission statements? The answer is as simple as the question itself: it is almost
generally recognized that mission statements make a difference (Baetz, 1996, Bart, 1998,
Campbell, 1991, Pearce II, 1987, Weiss, 1999). Most scholars depart thus from the
assumption that a well-crafted mission statement will positively influence organisational
performance “and that mission statements are equally important for firms in a variety of
strategic contents: large versus small, profit versus non-profit, simple versus complex (Morris,
1996)”. Although empirical evidence supporting the presumed positive relationship between
mission statement and organisational performance is scarce and results are very mixed, the
most commonly assumed benefits from mission statements are: (1) enhanced resource
allocation, (2) strengthened legitimisation and (3) reinforced shared expectations / values.
Enhanced resource allocation and strengthened legitimisation congruous with the strategic
view on mission statements. By clarifying the unique purpose of the organisation, its principal
stakeholders and how to satisfy their needs, the organisation constructs a strategic framework
that serves as a guideline for decision-making. By specifying the philosophy that will guide
the company it is hoped that stakeholders will accept, trust and support the organisation (de
Wit, ) with the required resources (Heene, 2001). Promoting shared expectations / values
refers to the cultural glue that can tie individuals together, creating a common identity.
5
As mentioned above empirical evidence underpinning the assumed benefits of a well-defined
mission statement is rather scarce and fragmented (Baetz, 1996, David, 1989, Klemm, 1991,
Wilson, 1992). The limited attempts made at linking a performance indicator (mostly of a
financial nature) with an organisation’s mission statement found no significant difference in
performance (Baetz, 1996, David, 1989, Klemm, 1991, Wilson, 1992). However when
performance is measured in terms of impact on desired employee behaviour Bart and Baetz
found in different research settings consistently strong positive relationships indicating that
various mission statement components (e.g. presence of values) have the ability to influence
employee behaviour (Baetz, 1996, Bart, 1996, Bart, 1996).
The scarce quantitative research thus seems to support the assumptions of the psychological
school (Coulson-Thomas, 1992): by providing employees a clear image of desired behaviour
and esteemed values, the concept of shared values and beliefs can influence in a powerful way
the behaviour of employees (Calfee, 1993, Truskie, ).
Based on these findings this wants to suggest a conceptual framework to examine the
relationship between the value-component of mission statements and organisational
performance as supposed by the psychological school. Although this presumed relationship
seems to be supported by empirical data, it is still very roughly defined and unexplored. Based
mainly on work by Bart, Campbell, Collins and Pearce this paper aims to unravel the different
elements causing an organisation to establish a fit between the desired conduct of
organisational members and their actual conduct by defining a mission statement.
The proposed conceptual model starts with emphasizing the need for a “valid mission”. A
valid mission statement is attained when the formal mission statement expresses values
(defined by Rokeach as “abstract ideals, positive or negative, not tied to any specific object or
situation, representing a person’s beliefs about modes of conduct and ideal terminal modes …
which transcendentally guide actions and judgements across specific objects and situations
(Rokeach, 1968)”) that are truly a part of the organisational culture. There must be an actual
congruency between the formal expressed values of the organisation and the underlying
implicit values of the organisation.
6
Mission
Values
Value
Congruence
Valid
Mission
Organisational
Values
A formal mission statement must be firmly grounded in the day-to-day reality of
organisational life (Campbell, 1997). The purpose of a mission statement is not to enumerate
an extensive list of values with the sole purpose of adorning the annual report or
organisational website. Mission statements must mirror those values that are embedded in the
organisational culture. Statements that are merely window dressing will evoke cynical
reactions and lose all credibility (Bartkus, 2000). Once the implicit organisational values are
made explicit an effort must be made to disperse them throughout the organisation.
Once all employees are aware of the core values of the organisation a second delicate process,
which forms the cornerstone of the proposed conceptual model, emerges. According to
Campbell (Campbell, 1997) the values and behaviour standards contained in mission
statements can evoke three kind of response: (1) The yawn of boredom. The mission
statement is a bland motherhood and apple pie – statement impossible to appeal. (2)
Emotional resistance. The expressed organisational values differ from the values held high by
the individual employee. Value-conflicts arise and will have a negative influence on the
organisation – employee relation. (3) Emotional support. “The reader recognizes the values
and feels uplifted by being associated with them. It brings an emotional applause.”
It is self-explanatory that only the third response evokes a positive influence. Consequently a
match between the value system of the individual and the value system of the organisation is a
key element as values are important determinants of employee behaviour in organisational
settings.
Personal
Values
Value
Congruence
Explicit
Organisational Values
7
Based on the Image Theory, an alternative descriptive theory of decision-making, Liedtka
(Liedtka, 1989) argues that the concept of value congruence becomes in issue only in its
absence. Given such a lack of congruence, logically, the strongest value system will dominate.
As the hallmark of a strong value system is set by the extent to which the underlying values
are consonant (at individual as well as organisational level), Liedtka distinguishes two
potential sources of conflict around values: “(1) internal conflict, within the self, and (2)
external conflict, between the self and the outside environment (the organisation) for our
purposes”. Hereby suggesting that the interplay between individual and organisational value
systems can be summarized in a matrix consisting of two similar bipolar scaled dimensions:
Organisational Values
Individual
Values
Consonant
Contending
Contending
I
II
Consonant
III
IV
In quadrant I of the Value Congruence Model a strong organisational culture dominates the
employee – organisation relationship. Compliance with organisational values is expected. In
quadrant II the organisational values are not clear. For an employee with a contending value
system, it will be very encumbering to notice that the organisation itself is struggling with a
value conflict and sends out mixed messages. “With no unified corporate value system
existing to serve as referent, individuals would be particularly susceptible to group influence”.
In quadrant III the outcome can be dual (symbolised by the diagonal line), depending on the
degree of fit between organisational and individual values, given that the individual as well as
the organisation have of a consonant value system: value congruence or value conflict. In
quadrant 4 strongly held individual values dominate in an environment of contending
individual values. “The behaviour fostered by this muddled organisational message might be
reflected in the opportunism of those who indulge, with little apparent sense of wrong-doing,
in insider trading, abetted in their pursuits by organisations whose espoused codes of conduct
differ from those actually in use (Liedtka, 1989).”
Several authors (Collins, 1995, Want, 1986) refer to the concept of value congruence, a
crucial element in the relationship “mission statement – performance”, as a “sense of
mission”. Campbell and Yeung (Campbell, 1991) define a “sense of mission” as “an
8
emotional commitment felt by people towards the company’s mission”. They believe that a
sense of mission occurs “when there is a match between the values of an organisation and
those of an individual”, as they noticed that in above average performing companies “the
commitment and enthusiasm among employees seem to come from a sense of personal
attachment to the principles on which the company operates”.
“Companies that assert more boldly what they stand for typically attract and retain employees
who identify with their values and become more deeply committed to the organisation that
embodies them (Bartlet, 1994)”.
Cornerstone of the concept “sense of mission” is the expected influence of value congruence
on employee commitment (Balazas, 1990, O'Reilly, 1991, Pozner, 1985, Valentine, 2002),
which in turn has been found to be associated with desirable outcomes and valued behaviours
(Boxx, 1991, Newton, 1999) and contributes to improved organisation effectiveness (Dick,
2001, Scholl, 1981) and the overall organisational performance (Connor, 1975, Elizur, 1996,
Kidron, 1978, Putti, 1989, Wiener, 1980):
Value
Congruence
Organisational
Commitment
Organisational
Performance
According to Elizur and Koslowsky (Elizur, 2001) “commitment refers to the attachment,
emotionally and functionally, to one’s place of work”. This psychological attachment to the
employing organisation can take several forms (Newton, 1999): (1) Calculative or compliance
commitment (Allan, 1990, Hrebiniak, 1972) and (2) attitudinal or affective commitment
(Mowday, 1998, O'Reilly, 1986). Calculative commitment is based on rewards received and
the threat of losing them while attitudinal commitment is based on feeling a feeling of
belonging to the organisation or on shared values and goals with the employer. Hall,
Schneider and Nygren (Hall, 1970) use the term “moral commitment” to describe
commitment that requires “the individual’s incorporation of organisational values and goals
into his own identity”.
It is obvious that the term “commitment” used in the concept “sense of mission” refers to
attitudinal commitment.
The level of attitudinal commitment of an individual towards his employing organisation is of
high importance as both the organisation and the individual benefit when commitment is high
9
(Randall, 1987). As Valentine et al. (Valentine, 2002) listed strong organisational employee
commitment leads to decreasing absenteeism (Hammer, 1981) and employee turnover
(Abelson, 1983) as well as increasing satisfaction (Hunt, 1985), performance (Morris, 1981)
and organisational adaptability (Abelson, 1983).
Furthermore the reciprocal character of the relationship between “value congruence” and
“attitudinal commitment” augments its impact on organisational performance since committed
employees will tend to reinforce the existing organisational value structure (Herndon, 2001).
Increased commitment “should therefore increase employees’ feeling of connectedness to an
[organisation], as well as their support for [organisational] values (Valentine, 2002)”.
As stated above value congruence between the organisation and the employee will ameliorate,
through the intervening variable of commitment, organisational performance. Based on the
above-mentioned rationales and academic literature this study would like to suggest a
theoretical framework articulating the relationships that lead from formulating mission
statements to subsequent organisational performance through the mediating variable of
commitment:
Sense of Mission
Personal
Values
Value
Congruence
Organisational
Commitment
Organisational
Performance
Explicit
Organisational Values
Valid
Mission
Value
Congruence
Organisational
Values
Mission - Organisational
Alignment
Mission
Values
10
Comments and discussion:
It is self-evident that the postulated relations in the proposed model are neither deterministic
nor fully determined by one single factor. The complexities of inter and intra-organisational
relationships makes it nearly impossible to conceive a model that embraces all possible
influencing components. The proposed model therefore rests on certain preconditions. In
order for the suggested cascade of relations to occur and for mission statements to influence
the behaviour of corporate agents some implicit prerequisites must be fulfilled:
(1) Well-Conceived: the formal mission statement has to reflect the actual values of the
organisation. By mirroring the values of employees mission statements will create, inspire
and energize workforce. “One’s faith and trust in the organisation’s integrity depends on
observed conformity between what the organisation says it stands for and what it is
perceived to do (Fritz, 1999).” Unfortunately in reality “most […] statements are bland,
toothless, or just plain dishonest. And far from being harmless, as some executives
assume, they’re often highly destructive. Empty […] statements create cynical and
dispirited employees, alienate customers, and undermine managerial credibility”
(Lencioni, 2002).
(2) Well-Communicated: all members of the organisation have to be aware of the existence of
the mission statement. Organisation must make a real effort to communicate the mission
statement effectively and thus heighten the employee penetration level, according to
Schwartz “the extent to which employees are aware as opposed to unaware of their code
(Schwartz, 2001)”, of mission statements.
(3) Well-Comprehended: all organisation members have to understand the mission statement.
Employees must clearly grasp the values and principles that will guide them in their day to
day and future activities (Stone, 1996)
(4) Well-Supported: the mission statement have to be embedded in the systems, procedures
and policies of the organisation. Or as Bart et al. (Bart, 2001) define it: missionorganisational alignment. Mission statements can only have an impact on an organisation
when they are “integrated into every employee-related process-hiring methods,
performance management systems, criteria for promotions and rewards, and even
dismissal policies (Lencioni, 2002).
11
Once these conditions are fulfilled mission statements have the ability to influence behaviour
through intervening variables. The proposed model puts “attitudinal commitment” in the
forefront as an intervening variable.
Although it is widely agreed that attitudinal commitment is a dependent variable of value
congruence and internalisation of organisational values (Balazas, 1990, O'Reilly, 1991,
Pozner, 1985), a simple bivariate relationship of value congruence and commitment is in all
probability too much of a simplification of the complex reality. Dick and Metcalfe (Dick,
2001) summarized the key antecedents of commitment by using two broad headings: (1)
individual factors and (2) managerial factors. Individual factors influencing organisational
commitment are: hierarchical position (Benkhoff, 1997, McCaul, 1995), position tenure
(Gregersen, 1992, Motaz, 1988), organisational tenure (Mathieu, 1989, Mathieu, 1990) and
age (Mathieu, 1990). Managerial factors influencing organisational commitment are: level of
organisational and managerial support, involvement in decision-making (Beck, 2000, Beck,
1997, Mowday, 1998, Porter, 1974), amount of feedback received about job performance and
job role (Mathieu, 1990), and leadership style (Blau, 1985, Williams, 1986).
Furthermore it is obvious that the intermediate variable “commitment” is not the sole variable
to determine the relationship between value-congruence and organisational performance.
Motaz (Motaz, 1997) for example puts “employee satisfaction” in the forefront as antecedent
of commitment while others stress “motivation” to fill in the “black box” between valuecongruence and behaviour.
It is clear that the proposed conceptual framework in this study needs to be confronted with
empirical data in order to corroborate and refine the assumed relations. Empirical testing will
help to address untouched questions such as:
(1) Which values relate most strongly with employee commitment?
(2) To what degree does employee commitment influence organisational performance?
(3) Is the relation between value-congruence and employee commitment positively or
negatively influenced by other variables?
(4) Is the relation between employee commitment and organisational performance positively
or negatively influenced by other intermediate variables?
(5) Is the relation between value congruence and organisational performance positively or
negatively influenced by other intermediate variables?
12
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