The Significance of Effective Mission Statements in Business Performance: The Case of the Banking Sector in Tanzania

Abstract

This article synthesises the findings of a study carried out on the relationship between the mission statement and performance in the banking sector. Four commercial banks—the Credit and Rural Development Bank (CRDB), Bank of India, National Microfinance Bank (NMB), and the National Bank of Commerce (NBC)—were involved in the study. Data collection was done through the administration of a semi-structured questionnaire with 64 employees from the four banks and interviews held with eight top management employees from the four banks, two from each bank.  Data from the questionnaire was subjected to qualitative statistical analysis whereas interview information was subjected to content analysis. Results show that the more the employees understood the mission of their respective bank, the more they invested extra efforts in making sure that they performed accordingly to meet the bank’s performance standards required of them. The CRDB and NBC, which were found to be banks that commit more efforts to making their mission statements well known among employees in addition to addressing the future of the business in a comprehensive manner, demonstrated that their employees were motivated and outperform those the NMB and Bank of India, which were less inclined to do so.

Key Words: Mission statement, employees’ performance, business performance, banking sector, Tanzania