CORPORATE MISSION: M UCH ADO ABOUT NOTHING OR ESSENTIAL STRATEGIC STEP?

1. CORPORATE MISSION: MUCH ADO ABOUT NOTHING OR ESSENTIAL STRATEGIC STEP? Ph.D Tamara JovanovMarjanova University “GoceDelcev” – Shtip, Faculty of Economics, Republic of Macedonia Ph.DRistoFotov University “GoceDelcev” – Shtip, Faculty of Economics, Republic of Macedonia

2. INSPIRATION? Checkmateposition of Macedonian companies!

3. Current state of art! • 98,7% SMEs employ 60% of the working force; • Loosing market share (in almost every industry); • Poor financial performances; • Adopted strategies of saving costs at all cost; • High percentage of closed start-ups in the first three years (30%); • Lack of strategic planning; • Main competitive advantage – low prices (i.e. poor quality); • Everybody else is to blame!

4. Research question: Is it something that they do/don’t do? • Literature review (what should be done): • A proactive market approach for better competitiveness; • The proactive approach includes: research, information, analysis, planning, implementation, control, corrections; • Strategic planning leads to better business performance; • The first step in the strategic planning process is the company's vision/mission statement; • The vision/mission statement is associated with better business performance (in developed economies).

5. Mission statement… • The mission is broad description of the intention of the company and the type of activities it plans to undertake (Campbell, 1997). • The mission statement defines the business that the company is in, its goals and approach to achieving those goals (Rigby, 2011). • Miller and Dess (1996) model the relationship between mission statements and the fate of a firm by specifying the intermediate linkages as follows:

6. Hypothesis (Three main research aspects) • 1. “The mission statement can be created step by step, using a model of key components and terms”; • 2. “Current practices in mission statements in Macedonian companies are substandard”; • 3. “There is a direct and significant connection between highly comprehensive mission statement and business performance, i.e. profitability”.

7. Identified components and terms (H1)

8. Results (H2) • Descriptivestatisticsshowsthat: • Allthecompanies (100 %) with poorprofit, andmostofthecompanies (80 %) withmoderatelypoorprofithavereportedlow comprehensive missionstatement. • Most of the companies (66.7 %) with verygood profit, and all of the companies (100 %) with extremely good profit, include highly comprehensive mission statements. • The majority of companies (57.9 %) reported that they had created low comprehensive or poorly defined mission statement, while a smaller proportion (42.1 %) have created a highly comprehensive mission statement. *Highly comprehensive mission statement includes all of the four main mission statement components (Ashridge mission model): purpose, strategy, values, standards of behavior.

9. Results (H2) • In most cases, Macedonian companies include one to two components related to the main purpose for existence, i.e. intention andstrategy. • All surveyedcompanies (100 %) includecomponentsofintent. • Most of them (94.7 %) include components of strategy. • About half of the surveyed companies (47.4 %) do not include a statement of values​​; • More than half (57.9 %) do not include any components of standards of conduct. • ThemissionstatementofMacedonianenterprisesismostlyexplainedbythe terms: • Productand/orownersasthebasicpurposeforexistence; • Costsand/orfinancialmeasuresas a strategyforachievingtheintention. • Termswith significantcorrelationwithperformance(corporatephilosophy, values, socialresponsibilityandconsumers) arerarelyused.

10. Results (H2) • Cross tabulation analysisshows that: • Alloftheanalyzedsmallbusinesses(100%) andthemajorityofmedium-sizedenterprises (71.4%) havecreatedlow comprehensive missionstatement. • Alllargeenterprises(100%) andsomeofthemedium-sizedenterprises (28.6%) havecreated a highly comprehensive missionstatements. • It ismorelikelythatlargecompanieswouldcreate highly comprehensive missionstatementsas a partofthestrategicplanningprocess, thansmallandmedium – sizedcompanies.

11. Results (H3) • Deductive analysis shows that: • There is a significant direct correlation (0.612) between highly comprehensive mission statement and profitability (Pearson correlation analysis). • There is a linear dependence of profitability of highly comprehensive mission statement(Simple linear regression analysis).

12. Conclusion… • Companies can create highly comprehensive mission statement by following a model that includes the key components and terms of a mission statement; • In the process of mission statement creation, managers should: • Clearly identify the corporate culture, values, strategy and view of the future by interviewing employees, suppliers and customers; • Address the commitment the firm has to its key stakeholders, including customers, employees, shareholders and communities; • Communicate the message in clear, simple and precise language; • Develop support throughout the organization.