By University of Phoenix
Every company will face important daily decisions as it develops. Rather than making each call independently, an organization can use its business plan as a guiding light, aligning each decision to its overarching goals and principles.
Determining the mission, vision and value statements is an integral step during the business planning process. Together, these three elements establish the purpose of a company, its goals and aspirations, and the ethics and principles that will guide it.
If you study for a bachelor’s degree in business, start a company or take steps to learn entrepreneurship, you will need to understand the differences between mission, values and vision statements. You will also need to grasp the important role that each one plays in establishing a company and dictating its direction.
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Core values are the principles that guide your operational and strategic decisions and goals. In many business plans, this step comes first. The company’s mission and vision need to fit with its founding principles.
It might be tempting to reduce a core values statement to marketing slogans about customer service or honesty. However, this aspect of a business plan is not meant only for external use. It includes a code of ethics that will guide employees and management and help foster a strong company culture.
More and more employees seek jobs that give them a sense of purpose, strong relationships and work they feel passionate about. With well-defined values, you can attract employees and executives who believe in the company’s culture and mission and embrace the shared sense of passion for the ultimate purpose of the company.
Core values are also practical for a day-to-day work environment. They provide ethical guidelines for dealing with clients, hiring employees and guiding behavior in the office. Clear rules ensure employees are aware of expectations about workplace actions.
It can be difficult to distinguish between personal and professional ethics.
Your code of personal ethics governs individual activities. These rules come from your upbringing, religious or philosophical beliefs, or experiences. They help you decide how to treat other people and make decisions during personal interactions.
Business ethics (or professional ethics) are different from personal rules. In a workplace setting, you need to make decisions based on what is best for your company or employer. This professional code will guide you with decisions such as hiring the best-qualified applicant (even if you have compassion for an unqualified candidate who needs the job more) or letting go of an employee who failed to meet expectations but with whom you have a strong, personal bond.
In most cases, personal and professional ethics exist side by side. But often in a company, the decisions should be based on what is best for business rather than what makes you feel the best personally.
Though you should place importance on your code of ethics and values, it is also essential to remember they are guidelines that inform decisions rather than unbreakable rules. In many workplace situations, your professional experience will make the correct decision apparent.
An organizational mission statement identifies a company’s goals. It should go beyond simply mentioning benchmarks and future aims to also include an explanation of how the organization will achieve its goals.
A mission statement is practical in and of itself because it helps with planning operations. Also, investors and stakeholders want clear information about company goals in order to make funding decisions and assess performance.
Mission statements also help inform daily operations. Decision-makers can take specific steps based on where the company is in relation to its mission. In other words, it can serve as a road map for hiring, budgeting, investing and strategizing.
To create a mission statement, look to other companies first for direction. For example, LinkedIn® offers a succinct, one-sentence mission statement that details its primary purpose. “The mission of LinkedIn is simple: connect the world’s professionals to make them more productive and successful.” With this sentence, LinkedIn offers insight into its purpose and also into its brand and what it plans to focus on as it develops.
It is easy to confuse a mission and vision statement. Both have to do with an organization’s overall aims. While a mission statement takes a more practical approach to what a company plans to achieve from day one, a vision statement focuses on what a company aspires to become in the future. It explains how the business should look when it finishes its growth and development processes.
Because it is more aspirational, the vision statement may have less of an impact on day-to-day decisions. However, it does play a role in long-term planning, the formation of workplace culture, branding, and getting employees and investors to buy into the company’s plans.
Finally, many investors and employees want to be involved with ambitious organizations. Vision statements offer an opportunity to underscore this drive.
Again, to create a vision statement, start by looking to successful companies for what a clear vision statement looks like. For example, Microsoft provides an example of an effective vision statement: “To help people and businesses throughout the world realize their full potential.”
Vision statements are typically more abstract than mission statements. This allows the company flexibility to develop and adjust to current conditions in the economy and its industry without contradicting its long-term vision.
Southwest Airlines provides an example of this with its vision statement: “To be the world’s most loved, most profitable, and most efficient airline.” Even if the budget carrier has to significantly adjust its operations due to passenger demand or fuel prices, it can justify these changes as necessary for moving toward its long-term aims.
Mission, vision and core values statements are foundational elements of every company. Businesses without well-thought-out philosophies or frameworks lack direction, have weak company cultures and poor organization. Management may be unsure of what to prioritize, what kind of workers to hire and where to invest assets and human resources.
Here are some specific advantages of having mission, values and vision statements.
Investors, stakeholders and other businesses will also look at these foundational statements to assess the company’s suitability for investment or partnerships.
Regardless of the size of a company, anyone involved in starting or managing a business should be familiar with mission, vision and value statements.
Here are some parameters to keep in mind when crafting these business plan essentials:
With strong mission, values and vision statements, you can create a business plan that provides clear guidelines for operating, planning and developing your company.
If you’re looking to learn more about more general online business programs that prepare students with skills for a variety of career paths, consider a program at University of Phoenix. Whether you’re looking to build the fundamentals or advance your skill set, there are plenty of degrees and certificates to consider.
Associate of Arts with a concentration in Business Fundamentals — From management to accounting, skills learned in this program are essential for anyone looking to build an educational foundation in business.
Bachelor of Science in Business — Knowledge of the ins and outs of running a business can spell the difference between success and failure in a competitive business world.
Master of Business Administration — Prepare for higher leadership roles in an organization. This degree program can prepare graduates for careers as business managers, operations directors and more.
Master of Management — Take your understanding of business organization and management to an advanced level. This degree program is perfect for those with experience in the workforce who are looking to take on greater leadership roles.
Doctor of Business Administration — Expand your understanding of organizations, work environments and industry. This program invites participants to delve into cutting-edge research in the field of business and develop skills for solving complex organizational problems.
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