Managers of small and medium enterprises: mission statement and enhanced organisational performance

Abstract

PurposeThe main purpose of this paper is to examine the relationship between mission statements and firm performance in the small to medium‐sized enterprise (SME) sector.Design/methodology/approachThis research is based on an empirical survey of small and medium‐sized enterprises located in science parks in the UK. A postal questionnaire was the main data collection instrument for this research. A combination of qualitative and quantitative approaches is employed for data analysis.FindingsThe important conclusions reached are that the existence of mission statements in the studied firms was associated with firm performance. It is also found that organisational performance is significantly associated with the degree of non‐managerial employees' involvement in the process of mission statement development. Finally, the presence of financial goals in the studied firms' mission statements were negatively associated with firm performance.Research limitations/implicationsThe present study is concerned with the relationship between mission statement and organisational performance in SMEs. A further study is recommended to investigate the impact of involvement and engagement with both mission statement formulation and evolution and the strategic decision‐making process, specifically decision‐making processes in SMEs.Practical implicationsIn order to increase firm performance, it is recommended that practitioners develop a meaningful mission statement and increase the involvement of their non‐managerial employees in the development of the mission statement.Originality/valueThe principal contribution of this first study is the attempt to explore the nature and role of the mission statement in enhancing organisational performance.