Today, I will be talking about the differences between mission statements, corporate objectives and business strategy. This article is part of the series on ‘what is strategy formulation’ where I also talked about how to build a profitable business model. You will agree with me that I couldn’t have possibly discussed all there is to be discussed in one accounting blog article. Hence, the reason behind this post on the differences between mission statement, corporate objectives and business strategies.
I will adopt a structured approach of discussing the three concepts in different almost self-contained section where I will define the terms, explain practical application of each term and then bring out the differences in a table at the end of the article. So if you are already familiar with the concepts and only interested in knowing what the differences between mission statement, corporate objectives and business strategies are please feel to skip to the comparison table towards the end of this piece.
No entity (both for profit and nonprofit) exists for nothing. A societal need must have been identified or perceived that the entity is set out to provide solution to. A mission statement attempts to condense the central purpose of why businesses are created. A mission statement does not care about the fine grains of how that purpose is to be achieved nor does it care about the strategy to be adopted – it is a statement that just says what a business is created to do – see advantages and disadvantages of mission statement.
Therefore, a mission statement can be defined as ‘a statement of a business’s core aim that is coined in a way that it reasonably motivates employees while at the same time gives reasonable insight to outside stakeholders.’
What is corporate objective?
I cannot imagine any venture that has turned out meaningful when there is no clear objective to work towards. Corporate objectives are those medium to long term aims that an organization must achieve in order to be classed as successful as per the criteria contained in its mission statement.
Unlike a mission statement, corporate objective attempts to put some numbers, procedures, and some mechanics that are all geared towards quantifying things in a bid to make it have some perspectives. Common corporate objectives include; (a) profit maximization, (b) increasing market share, (c) growing the business, (d) increasing revenue, etc
What is business strategy?
Think of business strategies as those little or major things that organizations do in a bid to ensure that corporate objectives are met. It could be anything from targeting high net worth individuals in your marketing campaign to focusing on the low of lows in a society.
Okay, now that we have looked at some foundational concepts in this article, let us now move to the next phase of the post which is to tabulate the differences between mission statement, corporate objectives and business strategy in the table below.
Seven (7) differences between mission statement, corporate objectives and business strategy
|Factor||Mission Statement||Corporate Objectives||Business strategy|
|Nature and purpose||Mission statement is overly generalizing in nature as its purpose is to make the identity of the business known to all concerned parties.||Corporate objectives is a bit more specific and often result oriented as its purpose is to motivate staff.||Clear to all involved, else, there will be more confusion. It must be actionable in order to achieve its purpose of pushing towards attainment of promises made in mission statement and objectives set thereafter.|
|Timeline||No specific time bound.||Must be achieved within a specified timeline.||Continuous in nature – timeline goal post keeps moving.|
|Measurability||Hard to measure as it is not quantified thereby creating some ambiguities and vagueness.||Easy to measure as it is usually quantified.||Somewhat hard to measure as it is sometimes hybrid in nature.|
|Costs||Very cheap as it consumes next to zero resources.||Consumes resources in both design and implementation stage in the form of; time and money.||Consumes resources in design and implementation but not as high as corporate objectives.|
|Criticality||Not critical to have but essential as it gives some sense of purpose and drive.||Must be in place as it acts as a control tool.||Must have as it makes the difference between being a successful business and being a failed business.|
|Complexities||Very simple to write and communicate to others.||Relatively easy to set suitable objectives but can be difficult to set perfect objectives.||Strategies are more complex than individual objectives and also not as simple as writing your mission statement.|
|Rationale||To monitor progress.||To ensure that mission is achieved and to satisfy stakeholders aspirations.||To help achieve mission and objectives.|