Setting of organizational objectives is the starting point of managerial actions. Since organizations are deliberate and purposive creations, they have some objectives; the end results for which they strive. These end results are referred to as ‘mission’, ‘purpose’,’ objective’, ‘goal’, ‘target’, etc. Many times, these terms are used inter-changeably as all these denote end results. However, there are differences in the context in which these terms are used. The end results are arranged in a hierarchy. On the one extreme end, there may be enduring reasons why an organization exists; on the other extreme end, there may be specific results that an individual in the organization achieves in a specified period. Therefore, the end results have to be specified by different terms in the context of these two extreme ends and, in between. This contextual difference among various terms is important in understanding their nature relevant for managerial actions. From planning point of view, an organization must define why it exists, how. It justifies that existence, and when it justifies the reasons for that existence. The answers of these questions lie in the organizations:
- mission and purpose,
- long-term objectives, and
- Time-bound objectives.
Mission and purpose are often used interchangeably, though at theoretical level, there is difference between the two. Mission has external orientation and relates the organization to the society in which it operates. A mission statement helps the organization to link its activities to the needs of the society and legitimize its existence. Purpose is also externally-focused but it relates to that segment of the society to which it serves; it defines the business which the company will undertake. We may consider the mission and the purpose of Hindustan Lever Limited to visualize this difference. About its mission, the company states that: Hindustan Lever’s commitment to national priorities has ensured that the company is a ‘part of people’s lives at the grass roots level, making a difference to India and to Indians-in depth, in width and in size. Hindustan Lever has always identified itself with the nation’s priorities: employment generation, development of backward area, agricultural linkages, exports, contribution to the exchequer; etc.
About its Purpose, The Company States That : Our purpose in Hindustan Lever is to meet the everyday needs of people every-where-to anticipate the aspirations of consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life.
Thus, mission of the company says what it can do for the country (society in general) while purpose suggests how this contribution can be made. However, in general practice, mission and purpose are either used interchangeably or jointly. For example, Drucker has taken this stand while defining mission and purpose He says:
“The purpose or mission of an organization is a general enduring statement of the organization the extent of which embodies the decision maker’s philosophy; it implies the image which the organization seeks to project.
An organization’s mission when expressed in managerially meaningful terms indicates exactly what activities the organization intends to engage in now and in future. It suggests something specific about what kind of organization it is and is to become. It depicts the organization’s business character and does so in ways that tend to distinguish the organisation from other organizations. Mission sets forth principles and conceptual foundation upon which the organization reacts and the nature of the business in which it plans to participate. Organizational mission, de-fined properly, offers guidance to managers in developing sharply focused, result-oriented objectives, strategies, and policies. Therefore, a detailed understanding of organizational mission is the starting point for rational managerial action and for the design of its strategies. Managerial effectiveness tends to begin with clarity of mission with an accurate, carefully delineated concept of just what the organization is trying to do and why.
A key feature of organization’s mission is that its focus must be external rather than internal. For example, Drucker has the following suggestion:
“To know what a business we have to start with is its purpose. Its purpose must lie outside the business itself. In fact, it must lie in society since business enterprise is an organ of society. There is only one valid definition of business purpose: to create a customer”
