Purpose: This study sets out to explore questions such as: "Does mission statement matter? If so, in what ways?" Using data on mission statements of 128 large Japanese firms, the paper aims to show that corporate mission has a significant impact on corporate policies that determine employment, board, and financial structures. Design/methodology/approach: The paper provides evidence that strong-mission firms are more likely to retain incumbent employees, promote managers from within firms, and have less debt and a higher percentage of interlocking shareholdings than weak-mission firms. Findings: The evidence supports the view that strong-mission firms value their organizational capital and thus tend to adopt policies to preserve it. It also confirms that corporate mission and its embedded policies contribute to better corporate performance. The paper suggests that the effect of explicit corporate mission and its implementation has practical impacts in corporate policies and business outcomes. Research limitations/implications: The sample is based on firms from Japan. The criteria used to discriminate between strong mission and weak mission firms need further refinement with more rigorous sub-dimensions. In the Japanese context the percentage of inside directors is an important indication of internally promoted managers - one might argue that a measure of external pressures (e.g. law, codes, investors, etc.) might be a better one. The small number of cases and the richness of statements need a richer qualitative analysis in the future. Practical implications: The empirical results provide helpful insight on the organizational behavior of Japanese firms during the long economic downturn from the 1990s to 2000s in Japan and an insight on what to do in view of the challenges facing Japanese firms. Originality/value: The paper presents a model that clarifies the role of mission statement. The extensive literature review includes a diverse set of papers on the role of mission statement. The empirical results suggest how strong Japanese corporate mission, expressed in mission statements, might have impact on corporate outcomes through the formation and utilization of Monozukuri.
ASJC Scopus subject areas
- Business, Management and Accounting(all)
- Management Science and Operations Research