The impact of mission on firm innovativeness

Abstract

<p>What impact, if any, does a firm's formal mission statement have on its innovativeness? Over the years, the mission statement has been regarded as one of the cornerstone documents of the large, modern corporation. It has especially been seen as essential in terms of providing two major benefits: (I) better staff motivation and control regarding common organizational objectives; and (2) a more focused allocation of resources. Yet little is known empirically about the relationship between company mission and those management practices that contribute to a firm's innovativeness. In the current study, we identified 15 management practices which have been cited as being important for fostering innovation. We then surveyed 75 firms to determine: (a) the degree to which the 15 selected innovativeness practices were followed; (b) the degree to which these innovativeness practices were specified in the organization's formal mission statement; and (c) the relationships among formal mission, the 15 innovativeness practices and new product sales. Our results demonstrated that many of the 15 management practices identified as fostering innovation were widely used by the companies in our sample. These practices. in turn, were found to have a strong impact on new product sales. Interestingly, these practices were generally not well-articulated within the firms' mission statements. Nevertheless. we found a powerful and positive relationship between 'mission statement content' and the degree to which our 15 innovativeness practices were employed. The relationship between mission and new product sales. on the other hand, proved to be much more indirect.</p>