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Running head: VISION, MISSION, AND ETHICS IN ORGANIZATIONS 1

Vision, Mission, and Ethics in Organizations

Sharada H A

Capella University

VISION, MISSION, AND ETHICS IN ORGANIZATIONS 2

Vision, Mission, and Ethics in Organizations

Businesses today must constantly strive to adapt in an increasingly competitive

environment. In a constantly evolving business world, it is the core ideals and objectives of

businesses that guide their strategic decision-making and help them remain stable. This applies to

new businesses too, which need to establish their guiding principles early on, because proceeding

with insufficient experience and learning could prevent businesses and their leaders from

reaching their goals. These ideals and principles are stated as mission and vision statements––

both of which are essential for the success of any business.

What Are Mission and Vision Statements?

A mission statement defines a company’s purpose and fundamental objectives. It

communicates an organization’s reason for existence, and how it aims to serve its key

stakeholders.

A vision statement, on the other hand, is a concise and precise statement that presents a

futuristic view of the organization’s mission: what the company hopes to become and the target

it aims to reach.

What Purpose Do Mission and Vision Statements Serve?

Every business comes into existence to serve a purpose. Mission and vision statements

are representative of that purpose. A study conducted by Bain & Company established that 90%

of 500 firms surveyed had mission and vision statements to describe the nature of their business.

Moreover, the firms that developed mission and vision statements showed better performance

than firms that did not (Bart & Baetz, 1998).

VISION, MISSION, AND ETHICS IN ORGANIZATIONS 3

Vision and mission statements essentially help organizational leaders to:

 Communicate their organization’s purpose to its stakeholders;

 Keep the stakeholders informed about strategy development; and

 Create measurable goals and objectives that gauge future outcomes of their business

strategy (Dias & Shah, 2009).

Therefore, it is no surprise that mission and vision statements are considered to be

fundamental elements in creating a company’s identity.

Key Elements of Mission and Vision Statements

Since a mission statement is crucial for a company’s growth, it should include the following:

 What the firm’s aim(s) is

 Who the firm’s stakeholders are

 How the stakeholders are provided with value through specialized products and

services

 What the firm’s key purpose is

Google’s mission statement, for example, “To organize the world’s information and

make it universally accessible and useful” (Millard, n.d.) includes most of these details.

Likewise, vision statements have general principles that need to be considered in order to make

them reasonable. For example:

 The customer base must be defined in order to determine the target audience.

 Customers’ needs must be mentioned in order to persuade them to opt for the product or

service offered.

VISION, MISSION, AND ETHICS IN ORGANIZATIONS 4

 The product or service must be well described to provide the customers with an idea of

what the company offers.

 Company’s values must be included to ensure that customers perceive the right things

about the company (Ebben, 2005).

These elements of a mission and vision are key for management to connect with clients,

employees, and stakeholders, and to achieve financial gain. Along with financial goals, however,

businesses also have ethical responsibilities. While mission and vision statements help fulfill

financial goals, codes of conduct ensure that businesses and their stakeholders function in an

acceptable manner.

Code of Ethics/Code of Conduct

Maintaining a code of ethics can help a business attain positive results and make sound

decisions. A business environment that encourages and maintains strong values is usually a

productive workplace. A code of ethics, also known as a code of conduct, clarifies “an

organization’s mission, values, and principles, linking them with standards of professional

conduct. It includes details about how employees are to treat each other and clients, how

managers should treat their subordinates, and what is expected from contractors and vendors. In

addition, it includes the duties of top management toward the whole organization and the

organization’s social responsibilities.

A sound code of ethics will include the following:

 Values: It is highly essential for a business to delineate values such as trustworthiness,

respect, accountability, and objectivity to enable transparency.

VISION, MISSION, AND ETHICS IN ORGANIZATIONS 5

 Principles: Business principles like customer–organization relationship and company–

stakeholder relationship that support business values must be included in order to clearly

establish the standards that employees must adhere to.

 Management support: Managerial support methods, such as open-door policies, can be

included in the code of ethics for a general understanding of the working of the business.

 Personal Responsibility: It is important to list out personal responsibilities of an

individual toward the company through the code of ethics.

 Compliance: Any laws and regulations may be included in order to make employees and

stakeholders aware of the repercussions of unethical conduct (Sullivan, n.d.).

Violation of ethics can get companies in trouble with consumers, organizations, or

government bodies. This in turn may adversely affect the image of the company.

Role of a Company’s Leadership in Promoting Mission, Vision, and Ethics

Top-level managers of a business develop a vision and mission to maintain a strategic

framework throughout their organization and ensure consistency in performance and

expectations. It is, however, not enough for these managers to create statements and codes. They

must set good examples by acting in accordance with their mission and vision statements and

their code of ethics. Organizational leaders must promote their vision and mission by letting

employees know how they can contribute toward the larger goals of the organization and treating

issues raised by employees as suggestions and areas to improve (Spiro, 2010). They must

condemn decisions and actions that violate their business’s mission, vision, and code of ethics,

even if such actions promise greater economic rewards. A failure of a firm’s leaders to promote

VISION, MISSION, AND ETHICS IN ORGANIZATIONS 6

the principles it stands for is likely to leave the firm without a purpose and result in a conflict of

interest between its employees, management, and stakeholders.

Conclusion

The Business environment for existing and upstart organizations today is incredibly

competitive and constantly evolving. Developing a mission, vision, and code of ethics that is

supported and promoted by leadership with the core ideals of an organization is what drives

strategic decision-making and helps an organization remain competitive.

VISION, MISSION, AND ETHICS IN ORGANIZATIONS 7

References

Bart, C. K., & Baetz, M. (1998, November). The relationship between mission statement and

firm performance: An exploratory study. Journal of Management Studies 36(6), 823-853.

Abstract retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=716509

Dias, L. P., & Shah, A. J. (2009). Introduction to business. Retrieved from

https://books.google.co.in/books?id=BNU3AwAAQBAJ&dq=introduction+to+business+

vision+and+mission+statements&source=gbs_navlinks_s

Ebben, J. (2005, February 1). Developing effective mission and vision statements. Inc. Retrieved

from http://inc.com/resources/startup/articles/20050201/missionstatement.html

Millard, S. (n.d.). Characteristics of Mission and Vision Statements. Retrieved from

http://hilo.hawaii.edu/strategicplan/documents/SPC18_10_Mission_and_Vision.pdf

Sullivan, J. (n.d.). What are the key components of a code of ethics in business? Houston

Chronicle. Retrieved from http://smallbusiness.chron.com/key-components-code-ethics-

business-244.html

Spiro, J. (2010, August 30). How to get employees excited about your business vision. Inc.

Retrieved from http://inc.com/guides/2010/08/how-to-get-employees-excited-about-your-

business-vision.html

https://books.google.co.in/books?id=BNU3AwAAQBAJ&dq=introduction+to+business

http://smallbusiness.chron.com/key-components-code-ethics-

http://inc.com/guides/2010/08/how-to-get-employees-excited-about-your-%09business-