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Thursday, May 19, 2011

JD Ltd is a small manufacturing company. Currently they do not have a mission statement, dicuss whether or not such a statement would be useful to the company?

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A mission statement should be organisation specific and details an organisations reason for being. Most Mission statements bring together the companies main aims and objectives and present them as the long term, most important objective for the company to realise. Mission statements outline the way forward for a company in a way that best represents what the company is about.


If a mission statement was implemented correctly then there are several people who would benefit from it being in place. The customers would benefit, as the employees of the company would know better what was expected of them and the goals they are trying to reach. This will lead to less confusion within the company so the customer gets their service quicker and better quality. The employees will benefit for such a statement, as they will be much clearer on the company’s goals, a mission statement can be very motivational if it appeals to the employees. This is because they will work harder to try and achieve these goals set out by the directors if they have a personal interest in them. Investors of the company will benefit because Mission Statements often hold the goal of profit as the most important. If the company succeeds in making more profit then the investors will get a larger cut of the money and it will attract more investors to the company. It is also important for investors to be able to see the statement so they know if the company reflects there personal opinion, there may be other reasons for investing that just profit related ones.


An effective mission statement also depends on the sort of company that is trying to implement one. A small company, like a sole trader or partnership is unlikely to need a mission statement, as there are very few employees within the company. This makes communication through the hierarchy easier and negates the need for such a statement. A larger company like JB ltd would benefit more from the introduction of a mission statement because the hierarchy is a lot bigger and communication between the top and bottom much more difficult. A mission statement in this company would able the bottom end of the hierarchy to be able to understand the companies goals and give them a feeling for how the management thinks. An even larger company, like a multi-national one may need several mission statements for it’s company if it operates in many different fields. For example, Daewoo makes products that range from cars to televisions and it is difficult to imagine a mission statement that could incorporate all of these industries.


The overall effectiveness of the mission statement is dependent on a number of factors. Firstly, the way the statement is worded could cause problems. If it is unclear what the statement is getting at then employees may become confused as to the true meaning of the statement and begin to work on a tangent with it’s goals believing to be following them. It could also be worded in a way that annoys some of the employees and makes them feel that management doesn’t care about them. This will alienate the workforce and make them under motivated. The effectiveness of the statement also depends on who you involve in its creation. It is more motivating to get the workforce to help to create the statement but many workers will simply not care. This also takes time and can cause a lot of extra work and arguing. If it’s only the CEO or directors that create the mission statement then the employees may feel left out and come to resent the statement. A Mission statement can only be implemented effectively if the company follows the statement they have created. If in practice the company does the opposite then the mission statement is being ignored and is as effective as not having one. Ignoring a mission statement is even more of a problem if employees were involved in its creation. If you ignore it then the employees will feel that you are ignoring them and will become demotivated.


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In conclusion it seems that the majority of people within an organisation (customers, employees and investors) will benefit from the introduction of a mission statement. The effectiveness of the statement itself will depend on the size and type of company planning on implementing a mission statement. It also depends on who you involve the right format and the ability to follow the mission statement once it has been created. Overall I would advise that JB Ltd should definitely create a mission statement. This is because it is quite a large company that will have several employees. In a private limited company there is often a lack of communication between the employees and the upper levels of the hierarchy. A mission statement would help the employees feel closer to management and may lead to an increase in motivation. It is also wise to have mission statement in case the company ever decides to float itself on the stock exchange. In this instance it is useful to have a statement that tells potential investors what the company is all about.





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