Does Bristol-Myers Squibb Company of the encompassing the respective component w

Question

Does Bristol-Myers Squibb Company of the encompassing the respective component written from a customer perspective meet its particular mission statement/purpose: 1. Customers—Who are the firm’s customers? 2. Products or services—What are the firm’s major products or 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 distinctive competence or major competitive advantage? 8. Concern for public image—Is the firm responsive to social, community, and environmental concerns? 9. Concern for employees—Are employees a valuable asset of the firm? Their mission statement is: “To discover, develop and deliver innovative medicines that help patients prevail over serious diseases.” Explain the rationale and give references for your answers.

Explanation / Answer

Mission statement is a description of what an organization actually does – what its business is – and why it does it.[1]

Understanding the tool

Often called the “credo”, “philosophy”, “core values” or “our aspirations”, organization’s mission is the statement that defines its core purpose or reason for being. [2] It tells who a company is and what it does. According to P. Drucker, often called the father of modern management, a mission is the primary guidance in creating plans, strategies or making daily decisions. It is an important communication tool that conveys information about organization’s products, services, targeted customers, geographic markets, philosophies, values and plans for future growth to all of its stakeholders. In other words, every major reason why company exists must be reflected in its mission, so any employee, supplier, customer or community would understand the driving force behind organization’s operations.

There are two types of statements:[1]

Customer-oriented missions. Customer-oriented missions define organization’s purpose in terms of meeting customer needs or providing solutions for them. They provide more flexibility than product-oriented missions and can be easily adapted to changing environment. For example, Nokia’s statement “connecting people” is customer-oriented. It does not focus on mobile phones or smartphones only. It provides a solution to customer needs and could easily have worked 50 years ago, and will continue to work in the future. It also gives more strategic flexibility for the company. In Nokia’s case, it may start providing VoIP software to allow calls to be made over the internet and its mission would still be valid.
Product-oriented missions. Product-oriented missions focus on what products or services to serve rather than what solutions to provide for customers. These statements provide less flexibility for the company because most products have short life cycle and offer limited market expansion. The company that defines its business as “providing best health insurance products” may struggle to grow to other insurance product categories.

For a mission to be effective it must include the following 9 components:[2]

Customers. Who are your customers? How do you benefit them?
Products or services. What are the main products or services that you offer? Their uniqueness?
Markets. In which geographical markets do you operate?
Technology. What is the firm’s basic technology?
Concern for survival. Is the firm committed to growth and financial soundness?
Philosophy. What are the basic beliefs, values and philosophies that guide an organization?
Self-concept. What are the firm’s strengths, competencies or competitive advantages?
Concern for public image. Is the firm socially responsible and environmentally friendly?
Concern for employees. How does a company treat its employees?
Why creating a mission is important?

Many studies have been conducted to find out if having and communicating mission statement helps an organization to achieve higher performance.[3] The results were mixed. Some studies found positive relationship between written statements and higher organizational performance, while other studies found none or even negative relationship. One of the reasons might be that most of the companies create mission statement only because it’s fashionable to do so and little effort is made to actually communicate that mission to its stakeholders. David[2] argues that if an organization constantly revises its mission and treats it as a living document, it achieves higher performance than its competitors. Nonetheless, all of the authors agree that mission brings the following benefits[3][4]:

Informs organization’s stakeholders about its plans and goals;
Unifies employees’ efforts in pursuing company goals;
Serves as an effective public relations tool;
Provides basis for allocating resources;
Guides strategic or daily decision making;
Shows that a company is proactive.
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