Frontiers of Entrepreneurship Research
1997 Edition
SUMMARIES
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THE IMPACT OF MISSION STATEMENTS ON THE PERFORMANCE OF ENTREPRENEURIAL WORK GROUPS:  AN EMPIRICAL TEST OF AN UNPROVEN ASSUMPTION

Gideon D. Markman
G. Dale Meyer
Joseph Rosse

University of Colorado at Boulder
Boulder, Colorado 80309-0419

Telephone: 303-499-7859
Fax: 303-492-7676

Principal Topic

Much has been written about mission statements, documents articulating an organization's vision, standards, goals, values, strategies, and purposes.  A mission statement may take many names; creed, credo, goal, inspiration, vision, value, belief, charter, philosophy, or purpose, to name just a few.  The underlying assumption is that organizational mission statements are responsible for, and a cause of, superior performance.  The conjecture, however, that a list of intentions in the form of organizational roles and goals is sufficient or even necessary to bring about a superior performance has repeatedly been challenged by scholars in the field of strategic management and work motivation.  Mintzberg and Waters (1985) and Mintzberg (1987), for example, have found that strategic intendments not always translate into strategic outcomes, and Locke and Latham (1990) assert that even attainable goals are not always reached.  Nonetheless, the use of mission statements is constantly growing, and six out of ten large US organizations now have them.  The impact of mission statements on entrepreneurial firms is even more questionable.  That is; doubts arise as to whether mission statements do yield better performance.  Moreover, to many organizations, mission statements represent a substantial financial expenditure; developmental costs may exceed $500,000 (Markman, 1996).  Thus, in the context of limited resources and/or among smaller and start-up firms, the benefit of creating and integrating mission statements is highly arguable.

In sum, this field research explores the widespread assumption that mission statements are an effective tool  for enhancing entrepreneurial work groups' performance.  Goal setting theory is used to provide a theoretical framework for establishing hypotheses about how mission statements should affect organizational performance.  These hypotheses are then experimentally tested by comparing independent entrepreneurial sales groups who developed mission statements to similar groups that did not develop mission statements.
 
Method

For reliability and control purposes, the sample chosen for this study had to have a readily measurable performance (DV) and shared membership in the same entrepreneurial organization.  To satisfy these parameters, we studied entrepreneurial sales groups from a Fortune 500 company, where performance was measured unequivocally by their volume of monthly sales and their group size.  Although over 1600 unit members were involved, our sample size was 40 sales units, where 22 groups served as controls and 18 groups were in the mission statement condition.  The unit of analysis, then, was the sales team (N = 40).

The treatment condition included a 150 minute workshop on mission statement development, which was conducted by the first author to 18 sales team directors in the mission statement condition.  The guidelines for writing the mission statements included the following: the statements had to be clear, inspiring to the director, relatively short, and convey the director's vision for the unit's roles (not goals).  Most important, because we view mission statements as interactive tools (rather than just a plaque on one of the office's walls), the statements had to include rewardable or recognizable behavioral attributes.  Sales directors, then, submitted their first draft mission statement to the first author, who critiqued them.  Following this, a final mission statement was written and presented (as a poster) in each weekly sales meeting and in the next monthly newsletter.  Not surprisingly, since the sales units were very similar in terms of their roles and strategic objectives, the mission statements were comparable for research purposes.

Major Findings

To date, no significance improvement in performance may be attributable to mission statement incorporation.  These findings, notwithstanding, must be viewed with enhanced hesitancy:  Mission statement development workshop occurred in August of 1996, and collection of monthly data commenced in September of the same year.  Hence, the analysis included only four months of data.  It is quite possible that substantial more time is needed for mission statements to impact performance.  Indeed, we intend to continue with the data collection until we have at least 12 months worth of data.

Implications

This is the first study that scientifically challenges earlier intuitions that mission statements are a valid strategic tool to enhance performance.  In particular, this study demonstrates that four months after their incorporation; mission statements are not yet effective tools for improving performance among independent entrepreneurial units.  Furthermore, the study suggests that entrepreneurs who still elect to invest resources into the development and application of their mission statements, may await the final results of this study that will include a year long of data collection.

 

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