EFFECTS OF VISION AND MISSION STATEMENT ON FIRMS’ SURVIVAL

EFFECTS OF VISION AND MISSION STATEMENT ON FIRMS’ SURVIVAL

ABSTRACT

The mission statement is becoming an essential component of both public and private firm operating plans in and outside of Nigeria. This study was designed to highlight the impact of vision and mission statements on firm survival.

A descriptive survey was used in the study, and a research questionnaire was used to collect data; one hundred questionnaires were distributed to employees at Nestle PLC Sagamu. As a result, the collected data was analyzed using frequency count and t-test statistics. The study’s findings revealed that there is no significant difference in male and female workers’ perceptions of the effects of vision and mission statements, and there is also no significant difference in the survival of firms that use vision and mission statements and those that do not.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The mission statement is becoming an essential component of both public and private firm operating plans in and outside of Nigeria. Indeed, many modern organizations create simple or small draft documents that contain their mission statements or equivalents for a set period of time. For firms with a profit motive, the vision and mission statements serve as preambles to what they want to achieve and how to achieve it when preparing business plans, strategic and operational plans, and even letters to commercial banks. At the same time, strategic business management experts claim that a well-defined vision and mission help organizations align individual employees’ goals with corporate goals. In the past, strategic plans that articulate business missions and objectives, as well as the formation of business departments such as marketing and customer service, were given due weight (Dorrian, 1996; David, 2007). Indeed, the inclusion of mission statements in business documents appears to be here to stay in formally operating businesses, even if its contribution to marketing and customer care activities in the business entity is unclear. Mission and vision statements have been widely accepted as an essential component of the strategic management process for organizations of all sizes, whether they are public, not-for-profit, private, for-profit, multinational, or small and medium-sized. It is widely assumed that mission and vision statements have an impact on strategy.

Mullane (2002) argued and empirically supported the use of mission and vision statements in practical day-to-day operations, arguing that they are not archaic documents that are typically displayed as wall hangings. (Campbell and Yeung, 1991) have described how mission and vision statements can be used to create a common and shared sense of purpose while also serving as a conduit for shaping employees’ focus. Other schools of thought believe that mission and vision statements motivate, shape behaviors, cultivate high levels of commitment, and ultimately have a positive impact on employee performance (Mullane, 2002)

Strategic management expert Toffler (2003) writes that a firm without a strategy is like an airplane weaving through the skies, hurled up and down, slammed If it is not destroyed by lightning or strong winds, it will simply run out of gas. In a similar vein, Ross, Rosenberg, Schewe, and Perry (2000) state that an organization without a strategy is like a ship without a rudder. It goes in circles and, like a tramp, has no set destination. These statements clearly emphasize the importance and necessity of a comprehensive, systematic, and dynamic vision and mission planning for every firm seeking to survive competition in the ever-changing global competitive business environment. Ansoff (1970) contends that companies that are strategically managed produce better alignment and financial results than companies that are not. This suggests a clear link between strategic planning and Though these assertions are mostly correct, there are times when some companies benefit not because they had a strategy in place, but because of some unexpected conditions in the external environment. Nonetheless, and in keeping with the need for constantly evolving and reviewing strategy, it is important to note that having a sound strategy does not necessarily translate into desired performance goals if it is not properly implemented. To achieve positive results, both strategy and implementation must be good and timely. Malamud (2004) compares a firm driven by poor strategic planning to a train on the wrong track, claiming that every station it arrives at is the wrong station. Strategic planning, like other management initiatives developed primarily for business, is assumed to be adaptable despite differences between profit and non-profit organizations. A vision and mission statement provides the basic direction and rationale for determining an organization’s focus, as well as the specification against which any organization can best decide what to do and how to do it. Simply put, it is a process of envisioning and describing a better future in measurable terms, as well as selecting the best means to achieve the desired results. It is important to note that not all planning is strategic, even if it is labeled as such. It is said that failing to plan results in failing to plan.

1.2 STATEMENT OF THE PROBLEM

Management’s leadership role, which requires strategic thinking, planning, decision-making, and ultimate implementation, may also have a significant impact on the fortunes of various organizations in their respective industries. While differences in performance levels are to be expected, it is still widely held that the vision and mission pursued by each organization are largely responsible for the outcome of their survival.

Vision and mission are difficult processes that require people to think and act creatively. Management uses the vision and mission planning process to establish objectives, set goals, and schedule activities to achieve those goals. It also includes a method for measuring progress. These objectives can be met by following the steps of the strategic plan, which begin with an external and internal analysis, a clearly defined mission statement, goals and objectives, the formulation of specific strategies, and the strategy’s implementation and managed control process. The problems that most firms in Nigeria have faced are the result of a vision and mission statement, which has resulted in many firms failing to meet yearly demands, profits, and so on. As a result, there is a need to investigate the impact of vision and mission statements on firm survival.

1.3 OBJECTIVES OF THE STUDY

The study’s objectives are as follows:

i. To investigate the need for a vision and mission statement in an organization.

ii. To assess male and female workers’ perceptions of the effects of the vision and mission statement.

iii. To identify the survival of firms that use vision and mission statement strategy as opposed to those that do not use in the industry.

iv. To highlight the challenges that vision and mission statement strategy firms face.

1.4 RESEARCH QUESTIONS

Is it necessary for every organization to have a vision and mission statement?

Is there a significant difference in male and female workers’ perceptions of the effects of vision and mission statements on firm survival?

Is there a significant difference in survival between firms that use vision and mission statements and those that do not?

iv. What are the challenges that firms that use vision and mission statement strategy face?

1.5 RESEARCH HYPOTHESIS

H01: There is no statistically significant difference between male and female workers’ perceptions of the effects of vision and mission statements.

H02; There is no statistically significant difference in survival between firms that use vision and mission statements and those that do not.

1.6 SIGNIFICANCE OF THE STUDY

This research is expected to have an impact on strategic planning practitioners, firm management, academia, and the general public. The study’s findings will help to supplement the existing body of knowledge on the subject of vision and mission statements, as well as serve as a conduit for future research on innovative ways to gain a competitive advantage for the nation’s overall business well-being.

Furthermore, the research and its findings are expected to assist firms in the use of vision and mission statements, as well as elucidate decision making in the area of strategic management using strategic planning.

1.8  SCOPE OF THE STUDY

This study was limited to employees of Nestle Nigeria PLC in Sagamu, Ogun State.

1.9 DEFINITION OF TERMS

Vision is commonly regarded as a projection of the future. It is a vision of excellence, something that the individual, team, or company wishes to achieve in the best possible future.

Mission: A firm’s assumed responsibility stemming from its social goals. Mission reflects how vision can be transformed into a firm’s tangible existence.

Firms: it is defined as a business organization that owns, operates, employs productive resources to obtain products and/or services which are offered in the market with the aim of making profit.

1.10 DEFINITION OF TERMS

This research was divided into five (5) chapters. The first chapter serves as an introduction to the study, stating the research problem, objectives of the study, research questions, significance of the study, structure of the study, scope, and operational definitions of terms.

The second chapter is a review of relevant literature for scholars and researchers in the field of strategic management. The third chapter went over the specifics of the steps, tools, and procedures used to collect the data needed to address the research problems. Chapter four was dedicated to the analysis and discussion of data collected in the field surveys. The final chapter, Chapter 5, summarizes the findings, conclusions, and recommendations.