A Study On The Relationship Between Mission Statements And Corporate Financial Performance

Mission statement,which is the basis of all acts of the enterprise,illustrates the funda-mental nature of it and purpose or reason of its existence.Shaping the characteristics of anenterprise actually starts with making its mission clear.The mission statement defines themanagement domain of the enterprise,providing the basis for the establishment of its strat-egy and target.At the same time,the mission statement is a symbol of enterprise cul-ture,expounding the enterprise values and behavior standard and ensuring internal consen-sus on the business objectives.Finally,the mission statement is an effective propaganda tooland enables enterprises to establish good enterprise images.Formulation and release ofmission statements provide the basis for effective allocation and rational use of resourcesof enterprises,guide enterprises to focus on the management and operating activities,thusimprove the organizational performance.Sustainable competitiveness of enterprises can be enhanced through the missionstatements management only by an accurate grasp of the relationship between missionstatements and corporate financial performance.Based on China’s top100enterprises in2011,the thesis focuses on the relationship between mission statements and corporate fi-nancial performance and analyses the relationship between stakeholders’ mission statementof Chinese enterprises,elements dimension,mission function dimension and corporate fi-nancial performance.Research results show that there is a positive correlation between the employee andcommunity of the stakeholders dimensions and corporate financial performance.enterprisevalues/business philosophy,excellent incentive,core competence/means of mission ele-ments have a significant impact on ROA and ROS of enterprise financial performance;andthe mission of the motivating employees and guiding the unconventional decision have asignificant positive correlation on financial performance.Research conclusions verify thecorrelation between China’s corporate mission statements and financial perfor-mance.Enterprise development and release of mission statements have a financial basisand necessity in reality.