http://www.collegeofbusiness.fau.edu/po llack/article_missionstatement_2.htm Can a Corporate Mission and Philosophy Change Corporate Culture? by :… [602538]

http://www.collegeofbusiness.fau.edu/po llack/article_missionstatement_2.htm

Can a Corporate Mission and Philosophy
Change Corporate Culture?
by : Matsuoka Toshio

Journal of Japanese Trade and Industry
2002 Nov/Dec

http://www.jef.or.jp/en/jti/200211_004.html

Corporate Mission Statements Revered for Over 300
Years

A corporate mission summarizes a company's basic policies for realizing its goals, and
states the important goals that employees must strive to meet. It may be only a few words
or a few short sentences, but even the longe r ones tend to be no more than one page. A
number of Japanese companies, regardle ss of their sizes, have corporate mission
statements, and many of them display thes e on the walls of thei r offices or shops.
Creating corporate mission statements is not a practice that busine sspeople learned from
the developed nations of Europe and America. As early as 300 years ago, the father or
head of household of distinguished families and merchant families in the Edo period
(1603-1867) communicated instructions to his descendants and vassa ls, and these were
revered as the "family precepts." With the de velopment of the modern state in the Meiji
period (1868-1912), the national goals embodied in the slogan "A Rich Country and a
Strong Military" were communicated to the ci tizens as the "national policy." It was
against this backdrop that an outline of goals or policies, as well as instructions for
employees to follow, became essential to companies that had many workers and hoped to
develop over a long period of time. Such outlines came to be put into writing as corporate
mission statements.

Take the example of Daimaru Inc., one of th e oldest companies in Japan. Daimaru is one
of Japan's most typical depart ment stores, with large stores in locations such as Tokyo
Station and Osaka Station. Da imaru was founded in 1717 as a kimono fabric store in the
Fushimi area of Kyoto. Founder Shimomura Hi koemon distributed st ore policies entitled
"Service before Profit" to all the company' s stores, and these are still revered today,
nearly 300 years later. This philosophy was taken from the words of Xun Zi, a Confucian
scholar from the third century A.D. It means that those who work for the good of society
and other people first, and then only after that for th eir own gain, will flourish.

Hikoemon put this principle into practi ce by himself, and through active measures
succeeded in expanding his business. His shop flourished, and because he did not forget
about the poor, the people who lived in Kyot o wished him well. It is said that they
created a doll resembling Hikoemon, with a large head and of short stature, and
worshiped it every day. In 1837, when many were suffering the effects of a famine, there
was an uprising in Osaka by people who were demanding relief for the poor and
criticizing the bakufu (s hogunate) system. However, it is sa id that because the leader of
the uprising declared Daimaru was an honorable merchant and it was not to be harmed,
Hikoemon's store was spared from violence.

Living Mission Statements

Many foreign companies also have mission st atements. Some are quite simple. British
Airways aims "To Be The Best"; Merrill Lync h & Co. says "The interest of customers
must come first"; McDonald's Corp. targets "QSC + V (quality, service, cleanliness and
value)"; and NCR Corp. promises to "Creat e Value for Our Stakeholders." The Italian
company Olivetti's mission statem ent addresses ethical and cult ural elements, stating: "A
spirit whose aim is to unify this variety, fo r a specific objective: And the objective has
been to make a moral and cultural as well as a practical contributi on to the life of our
times." The corporate philosophies of some companies, like Apple Computer Inc., make
detailed statements regarding customer serv ice and quality, the growth and compensation
of individual employees, team spirit, and corporate ethics.

Because of the growing awareness that a compa ny's corporate culture is deeply tied to its
productivity, performance and even the very life of the company, there is increasing
speculation about whether corporate mission st atements have the ability to create a
desirable corporate culture or change one. Th ere is no easy answer to this question. Of
course, just acknowledging a corporate mission statement on a piece of paper will not be
enough in itself to alter the corporate cu lture, but there are examples of mission
statements that have had a significant im pact on corporate culture, depending on the
approach of the company. We will look at several of the more prominent Japanese
companies that have been struggling through the economic hardships of the past decade.

The first company to examine has to be S ony Corp., but unfortunately Sony doesn't have
a corporate mission statement. It might be because neither an old-fashioned term like
"mission statement" nor an appr oach that strives to control employees using such a notion

are suitable for Sony. Up until several years a go, founders Ibuka Masaru and Morita Akio
served the company as so-called "living mi ssion statements." The company has a general
notion it refers to as the "Sony Spirit." (Table 1) Sony's liberal and open-minded
corporate culture reflects these principles.

At Sony's 50th anniversary celebration in 1996, Idei Nobuyuki, now Sony Chairman and
CEO, said "to further heighten Sony's great est asset, the Sony brand name, four key
words were outlined in the company manage ment philosophy for all companies in the
Sony Group." – they are "Unique": Offer uni queness by continuously creating new things
and always striving to create expectation; "Quality": Make product quality the major
premise in the pursuit of that uniqueness; "S peed": Ensure that de cisions are made and
actions taken quickly in spite of the large size of the company; and "Cost": Offer cost
competitiveness while retaining excellence. It is impossible to feel the intensity of Sony
and its ability to outshine its competitors th rough these four keywords alone, but the Sony
brand itself serves the same role as a co rporate mission statement in solidly ingraining
Sony's mission of creativity, product quality and global reach in the minds of Sony
employees.

Like Sony, Honda Motor Co. is a company that has a "living mission statement"
embodied in the person of Honda Soichi ro. This company has established the
Fundamental Beliefs and Company Principle, as well as what it calls Management
Policies. The Fundamental Beliefs includes "R espect for the indivi dual" and the "Three
Joys": the joy of buying, the joy of selli ng and the joy of creating. The Company
Principle says: "Maintaining a global viewpoi nt, we are dedicated to supplying products
of the highest quality yet at a reasonable price for worldwide customer satisfaction." The
company's Management Policies focus on five items: (1) Proceed always with ambition
and youthfulness; (2) Respect sound theory, develop fresh ideas and make the most
effective use of time; (3) Enjoy your wor k, and encourage open communications; (4)
Strive constantly for a harmonious flow of wo rk; and (5) Be ever mi ndful of the value of
research and endeavor.

Neither Sony's nor Honda's mission statemen ts contain the terms "wa" (harmony) or
"seijitsu" (sincerity), some of the most of ten used terms in the mission statements of
Japanese companies. The omission does not m ean that the companies are indifferent to
these concepts, but it may reflect their be lief that a liberal and open-minded corporate
environment is more important for creating corporate vitality and that showing strong
performance will end up creating "harm ony" and "sincerity" among employees.

Honda's English-language mission statement is mo re than just an English translation of a
Japanese-language mission statement. The dr aft prepared at Honda's headquarters was
sent out to its offices around the world, and wa s completed after more than six months of
discussion among the company's employees. Missi on statements that are short but deeply
meaningful can and should be used by Japane se companies as a step toward overcoming
the boundaries of language and culture.

Three Terms Illuminate GE

One of the most brilliant companies in the Un ited States has to be General Electric Co.
(GE), a company which has made great stride s under the leadership of ex-CEO Jack
Welch. Among Fortune magazine's "Most Admi red Companies" (a list celebrating its
20th anniversary in 2002), GE ranks at the t op. Like Sony, GE does not have any official
corporate philosophy, but Welch's mission statem ent consists of three simple words:
boundarylessness, speed and stretch. These reflect the basic principles of GE.

Boundarylessness refers to GE's desire to break down walls and barriers within the
company and between GE and other organizations to cultivate the free flow of ideas. The
larger the company grows like GE, the more easil y it tends to build walls, stifle creativity,
waste time, narrow vision and eventually hi nder progress. Boundarylessness facilitates
the free flow of ideas and improves any activ ity. This concept is manifested in the
meeting of employees known as the "Wor kOut" in which various people in each
department get together to investigate bus iness issues and examine the quickest and
simplest ways to move forward. In this way, improved processes can be even further
improved by comparing them with the excellent methods adopted in other departments or
other companies around the world.

Companies that emphasize "speed" as one of thei r basic principles are rare, so it is quite
interesting that both GE and Sony do so.

The third principle, "stretch," refers to the id ea that it is all right initially to put off
concerns about specific pro cesses to first try reaching to ward a dream. "Boundaryless
people, excited by speed and inspired by stre tch dreams, have an absolutely infinite
capacity to improve everything," exhorts Welch.

Toyota Motor Corp.'s Guiding Principles

While many of the best Japanese companies have been struggling since the collapse of
the bubble economy, Toyota Motor Corp., among others, conti nues to exhibit renewed
performance. Because of Toyota's awareness th at it is during times of major upheaval in
the business environment that it becomes mo st important to reaffirm the path the
company must take by adopting a solid phi losophy, the company began fundamentally
revising its basic principles in the late 1980s. In January 1992, it outlined its basic
philosophy in the Toyota Guiding Principles . Toyota prepared a set of extremely
thorough principles that take into consider ation such issues as the globalization of
business activities and the intense internati onal economic friction that such globalization
creates, the expansion of the company's social responsibility as a "c orporate citizen," the
intensification of environmental problems, se vere consumer skepticism regarding auto
safety and a self-awareness of its responsibilities as a major Japanese company. (Table 2)

When it established its new mission statemen t, Toyota took the opportunity to transform
itself from the auto maker boasting the best product quality, larg est market share and
highest profits, into a leading domestic a nd international company characterized by a
sense of social responsibility, an active comm itment to addressing issues of the global

environment, improved business ethics and an ability to steer the entire economy. Toyota
is a good example of how efforts to revise the mission statement over several years, and
the top management's firm commitment, si gnificantly changed the corporate culture.

The Secret of Southwest Airlines' Popularity

When thinking about issues of corporate culture, Southwest Ai rlines (SWA) is a
company that stands out from the rest. Ho w does SWA express its corporate philosophy
and mission statement?

The company's mission is "dedication to the highest quality of Customer Service
delivered with a sense of warmth, friendline ss, individual pride, and Company Spirit."
Especially noteworthy, however, is the message that follows this statement. The message
entitled "To our Employees" states: "We are co mmitted to provide our employees a stable
work environment with equal opportunity fo r learning and personal growth. Creativity
and innovation are encouraged for improving th e effectiveness of Southwest Airlines.
Above all, employees will be provided the same concern, respect, and caring attitude
within the organization that th ey are expected to share exte rnally with every Southwest
Customer." People tend to think of a mission st atement as a set of unilateral instructions
from management to employees stating what is required of them. In this case, however,
management makes commitments to the employees, promising to provide them with a
"stable work environment" and to treat them with "concern, respect, and [a] caring
attitude."

Nonetheless, this kind of mission and messa ge alone does not automatically produce an
excellent working environment or outstandi ng customer service. What sustains the
company's employees when the workload is heavier than at other companies and
employees are working a lot of overtime hours are the actions of the managers
themselves and their genuineness toward th eir employees. According to an assistant
human resources manager cited in Say It & Li ve It by Patricia Jones and Larry Kahaner,
"We act as if there is always a financial crisis. We ask employees not to spend extra
money unless they have to. We don't have m eetings at fancy hotels; we stay in crew
hotels. We don't have corporate cars. Even the chairman purchases his own car."

"Learning and personal growth" are not just empty words. Southwest has opened what it
calls its "University for People" where em ployees go every year for training. They
improve their capabilities by recognizing and addressing their own weaknesses, and then
learn how they can best provide customer service. When an employee does outstanding
work or provides an especially high level of customer service, his or her efforts are
recognized. The company chairperson sends a letter to the employee's home expressing
the company's gratitude and appreciation.

Mission Statements and Corporate Scandals

Finally, it is important to discuss the recent ra sh of corporate scandals in the context of
mission statements. The Federal Reserve Boar d's Chairman Alan Greenspan criticized

corporate leaders for their "infectious greed" and deteriorating ethics in a speech before
Congress, but no one knows when the impr oper behavior among American companies
will end. Though not on the same scale as in the United States, even Japan has had its
own share of corporate scandals which have whittled away consumer trust. What kind of
corporate mission statements do th ese kinds of companies hold?

Recently two powerful food industry companie s in Japan, Snow Brand Foods Co. and
Nippon Meat Packers Inc., were harshly accused of improper actions related to their beef
processing. I checked the mission statements of these two companies, but as I expected,
they made no mention of the ethics of mana gers or employees. By contrast, even some
companies which have great mission statements have been plagued by repeated scandals
and have had chairpersons or pres idents who were forced to resign.

Nomura Securities Co., Japan's leading securities firm, wa s accused of providing
compensation for losses and offering financing to organized criminal syndicates, and its
top executives were forced to resign twice in the 1990s. Th e founder of the company in
the early 20th century believed that "trust and integrity will allow a business to succeed in
any era." He named his children Shinnosuke (usi ng the Chinese character for "trust") and
Jitsusaburo (using the Chinese character for "int egrity"), and asked that they earn the trust
of their customers and conti nue to run their bus iness with integrity. The top Nomura
executives seem to have gotten too comforta ble in their positions and forgotten the
founder's lessons about "fighting for justice and protecting honor re gardless of profit."

Likewise, in the case of Sumitomo Co rp., which experienced an unprecedented,
enormous loss of $2.6 billion due to illegal tr ansactions in copper ingots by a single
department manager, the company had a well known corporate mission statement which
was expressed in the old-fashioned Japanese of 1882: "Do not engage in a business
without substance for immediate profit al one." Had each company employee really
internalized the company's mission, perhaps th ese kinds of improper transactions could
have been avoided. For this to happen, lead ers cannot simply keep repeating the mission
statement; they have to put it into practice in their own daily behavior and the way they
evaluate the performance of those they manage.

The corporate mission statement of America's Enron was expressed in a message entitled
"Our Values." It included statements like "We treat others as we would like to be treated
ourselves" and "We work with customers a nd prospects openly, honestly and sincerely."
Their mission statement was really quite re markable. It seems, however, that although
most of the employees abided by these e xhortations, they were forgotten by the top
executives. Having a respectable mission statement is not enough. The important
question is to what extent it has been in ternalized by the company's executives and
employees.

Thoroughly ingraining the corpor ate mission in employees and managers is difficult for
any company. Two of Japan's best known companies added the need to be "good
corporate citizens" to their mission statements in the early 1990s. As the researcher who
introduced the concept of "corporate citizen ship" to Japanese industry, I have been

invited numerous times to speak to both of th ese companies. I started those presentations
by asking "Who has heard the term 'corporate citizen' before?" Even today, however, 10
years later, fewer than 10% of employees have either seen or heard of that term. Many
employees at my presentations would pull their business cards out of their pockets only to
be amazed to find the term printed on thei r very own cards. Getting the majority of
employees to fully internalize the company's mission is a truly difficult task.

Let's look at a few companies to see how th ey have succeeded in getting employees to
internalize their mission. IBM is a company that has not only established clear ethical
standards, but also requires its employees to sign an affidavit every year indicating that
they are adhering to those standards. Matsush ita Electric Industrial Co. displays framed
copies of its principles a nd creed in each workplace, and holds morning meetings where
all the employees gather for about 10 minut es every morning. They sing the company
song and then recite together the Basi c Management Objective and the "Seven
Principles" to which the company is committed. These include a spirit of "Fairness and
Honesty" and a spirit of "Gratitude." This kind of stru cture may be criticized for its
resemblance to either a nursery school or a military unit, but given the recent outbreak of
scandals, anything less may not be enough to help employees to really inte rnalize their
company's corporate philosophy.

Johnson & Johnson was highly praised for its "customer first" approach during the
Tylenol tampering crisis in 1982. When asked whether the company's actions were based
on some kind of crisis management manual, the company president at the time answered
that they didn't have a manual, but what th ey did have was the confidence that they
wouldn't go wrong if they based thei r decisions on the company Credo.

The first item in Johnson & Johnson's corporate mission statement says: "We believe our
first responsibility is to … all … who use our products a nd services." What is impressive,
though, is the effort the company has taken to ingrain this notion fully in its employees.
Once every few years, the company holds a "Credo Meeting" which is attended by
managers from Johnson & Johnson workplaces all over the world. Participants spend
days figuring out how best to get employees to understand and put into practice the
principles expressed in the words contained in the Credo. And surprisingly, the regular
employees evaluate the managers of each workplace on whether they are managing their
operations based on that mission statement. If a manager is not evaluated highly enough,
he or she may be replaced. Had Enron or WorldCom Inc. adopted this kind of system,
perhaps these recent unfortunate in cidents could have been avoided.