APJ5Feb17 4247 1

Asia Pacific Journal of Research in Business Management
Vol. 8, Issue 2, February 2017 Impact Factor: 5.16, ISSN: (2229-4104)

www.skirec.org Email Id: skirec.org@gmail.com
CONTENT AND READABILITY OF THE MISSION STATEMENTS OF PUBLICLY-LISTED PHILIPPINE

COMPANIES: ITS RELATIONS TO MARKET CAPITALIZATION
Dr. Jesus P. Briones, FBE

Director – Publications, Research, Linkages & Liaison
University of Batangas, Hilltop, Batangas City, Philippines
Dr. Doringer P. Cabrera, CPA, AFBE

Dean – College of Business & Accountancy
University of Batangas, Hilltop, Batangas City, Philippines
ABSTRACT:
This study evaluated the mission statements of publicly-listed Philippine companies relative to their
conformance with the nine components of a good mission statement based on Pearce and David’s
Strategic Management Model. For evaluation purposes, the Gunning Fog Index scoring system was used
to determine the readability aspect of the subject-mission statements. Further, the study classified the
companies according to their market capitalization and the business sector to where they belong as part
of the analysis of the content and readability of the mission statements. Of the 312 publicly-listed
companies from the Philippine Stock Exchange, 76 mission statements obtained from the respective
companies’ websites were reviewed and analyzed. In general, the study revealed that of the nine
components, markets and technology were not given due importance in the process of developing the
mission statements while the rest of the components were stated in vague terms. Further, no significant
difference was noted in both the market capitalization and business sector groupings as to the
conformance of the companies to each of the nine components of the mission statements. However, it
was found out that in both groupings, the tests showed high significant difference when their
conformance to the nine components are compared. On the aspect of readability, the mission
statements were found to be very difficult to read and required revision so they can be better
understood by their stakeholders. The study concluded that since the components and the readability
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Included in the International Indexing Directories
of mission statements have no correlation with market capitalization, the former are not predictors of
the latter.
KEYWORDS: mission statement’s content and readability; publicly-listed companies; Fog index score;
market capitalization; business sector
1. INTRODUCTION:
The importance of formulating an effective and purpose-driven mission statement has gained more
recognition through the years as such generally reflects the essence of existence of a particular
organization. A clearly defined mission statement differentiates the roles an organization plays in its
environment and is considered as one of the important tools in strategic management because of the
expectations of the stakeholders in the midst of environmental dynamism. For the publicly-listed
companies in the Philippines, the mission statement is an integral part of organizational operating plans
such that their preambles constitute what they want to achieve and how to achieve them when
preparing business plans, strategic and operating plans. A mission statement is a unique, clear and well
written statement that articulates the mission to different parties related to an organization (Hossain,
2004) and shapes the identity, purpose and direction of an organization. A carefully prepared mission
statement is widely recognized by both practitioners and academicians as the first step in strategic
management, such that a clear mission statement is essential for effectively establishing objectives and
formulating strategies (Collins & Rukstad, 2008; Powers, 2012). Previous researches have indicated the
advantages of a well-formulated mission statement including other benefits such as setting the
boundary line in meeting the objectives (Moin, Ali, & Khan, 2012); serving as standard for decision
making (Moin, et al., 2012); and encouraging and inducing workers to envision a role for themselves in
the long term objectives of the organization (Ahmed, 2010). Therefore, having a clear cut, meaningful
mission statement is important. According to Sukanya (2011), a mission statement also needs to be
intelligible, credible and appealing for everyone to grasp, accept, imbibe and implement it in the
organization.
The mission statements posted on the websites of publicly-listed companies can provide potential
investors with relevant information that they can utilize for their investment decision making. Thus, a

company with clearly defined mission statement that is comprehensible to the company stakeholders is
presumed to have a competitive advantage in maximizing its investment opportunities. Relative to this,
the study examined whether the mission statements of publicly-listed Philippine companies comply with
the components of a good mission statement based on Pearce and David’s model (Pearce & David,
1987); likewise, it also evaluated the readability aspect of the mission statements.
Considering the importance of the mission statement in the development of business strategy, the study
also attempted to relate the quality of mission statements with the market capitalization of publicly-
listed companies. Market capitalization refers to the total value of the tradable shares of a publicly-listed
company. The formula for the computation of market capitalization is: share price multiplied by the
number of shares outstanding (Philippines: Stock Market Capitalization, n.d.). There had been several
researches that investigated the relationship between mission statement and the firm’s financial
performance; however, the findings in most cases were not very conclusive. Added to this, it has also
come to the attention of the researchers that there is a dearth of researches investigating the
relationship of market capitalization to the quality of organizational mission statement. Going further,
the researchers also presumed that aside from financial performance, market capitalization may be a
factor in the investment decision of potential shareholders. Hence, this study is initiated.
2. METHODOLOGY:
This study examined the components and readability level of mission statements of publicly-listed
companies in the Philippine Stock Exchange using content analysis. Of the 312 publicly-listed companies
as of May 15, 2016, seventy-six (76) were taken randomly as sample (using Slovin’s Formula and 10%
margin of error, see Appendix A). The sample companies were further classified according to market
capitalization (small, medium, large) and the business sector where they belong to (financial, holding
firms, industrial, services, others—mining, oil and property). The mission statements obtained from their
respective company websites were reviewed using Pearce and David’s Strategic Management Model
that employs nine components in assessing the quality of a good mission statement. The following are
the nine components of the said model, according to David (2010):
1. Customers – Who are the firm’s customers?
2. Products/ Services – What are the firm’s major products or services?
3. Markets – Geographically, where does the firm compete?

4. Technology – Is the firm technologically current?

5. Concern for survival, growth, and profitability – Is the firm committed to growth and
financial soundness?
6. Philosophy – What are the basic beliefs, values, aspirations, and ethical priorities of the
firm?
7. Self-Concept – What is the firm’s distinctive competence or major competitive advantage?
8. Concern for Public Image – Is the firm responsive to social, community, and environmental
concerns?
9. Concern for Employees – Are employees a valuable asset of the firm?
To assess the presence or absence of these components in the subject-mission statements, a rating
scale was used with the assigned value of: 0 to indicate the statement does not include the component;
1 to indicate the statement includes the component in vague terms; and 2 to indicate the component is
specifically included/ clearly stated in the statement.
The Fog index score developed by Robert Gunning was used to determine the readability of the mission
statements. The Fog index score (Cochran, David, & Kendrik, 2008) used to measure the readability level
of mission statement of publicly-listed companies is one of the simplest and most effective manual tools
for analyzing readability, following this procedure: First, count the number of words and the number of
sentences in the mission statement to compute the average number of words per sentence. Next,
determine the number of difficult words (words of three or more syllables, abbreviations and symbols,
excluding capitalized words, unless symbolized or abbreviated) and compute the number of difficult
words per 100 words. Then, compute the sum of the word average and the difficult word percent.
Finally, compute the Fog Index which indicates the readability level by multiplying the sum of the word
average and the difficult word percent to 0.4. The Fog index score estimates how many years of
schooling a person would need in order to read and comprehend the text after reading it only once
(Green & Van Kessel, 2011).
Other statistical tools that were used in the study are frequency and percentage, weighted mean,
analysis of variance (ANOVA), Pearson R, and regression analysis.

3. RESULTS AND DISCUSSION:

This part of the paper presents, analyzes, and interprets the data resulting from the content analysis and
test on the readability of the mission statements as conducted by the researchers. For clarity of
presentation and consistency in the discussion, the data are presented according to the objectives of the
study.
PROFILE OF THE SAMPLED PUBLICLY-LISTED COMPANIES: Table 1 shows the profile of the sample
publicly-listed companies as grouped according to market capitalization category and business sector.
Under the market capitalization category, the companies are classified as small, medium and large.
Large market capitalization (or large caps) companies are typically defined as companies with market
capitalization that are above $10 billion (above P466.84 billion; 1 US$ = P46.684 as of May 15, 2016).
This refers to companies that are very stable and are dominating their industry. On the other hand,
medium capitalization companies (or mid caps) are typically defined as companies with market
capitalization that are between $2 billion and $10 billion (P93.368 billion – P466.84 billion). Mid-cap
stocks tend to be more risky than large-cap stocks but less risky than small-cap stocks. Small market
capitalization companies (small caps) are typically defined as companies with market capitalization of
less than $2 billion (less than P93.368 billion). Many small caps are young companies with significant
growth potential (Market Capitalization, 2016). It can be noted from the presented data that the
majority (65.79%) of the sample companies have small market capitalization while most of the sample
publicly-listed company’s equivalent to 28.95% belong to the industrial business sector.
Table 1: Profile of Sampled Publicly-Listed Companies
Market Capitalization Category Frequency Percentage
Small 50 65.79
Medium 20 26.31
Large 6 7.90
Total 76 100.00
Business Sector Frequency Percentage

Financials 12 15.79
Holding Firms 15 19.74
Industrial 22 28.95
Services 14 18.42
Others (Mining and Oil, Property) 13 17.10
Total 76 100.00

CONFORMANCE TO THE COMPONENTS OF THE MISSION STATEMENTS:

BASED ON MARKET CAPITALIZATION: The content analysis of the mission statements of the publicly-
listed companies as grouped according to market capitalization is presented in Table 2 where it is shown
that of the nine components listed, technology is not prioritized in the mission statement developed by
companies across all market capitalization classifications which is a deviation from the mission
statement’s supposed purpose of providing strategic innovative direction to the organization.
Meanwhile, the other components are generally present but are vaguely stated. This is the same finding
obtained by Fazizadeh and Malekpour (2015) when they reviewed the top ten Iranian companies’
mission statements which showed that these companies did not consider technology among the
components. Technology is also the least marked component in the study conducted by Azizi and
Hosseinabadi (2014). This study’s finding indicated that even in companies that are already successful
and financially capable, the important role of technology to further advance their company operations is
notably ignored. Therefore, there is a need for the technology component to be communicated more
Table 2: Mission Statement Content Analysis of Publicly-Listed Companies by Market Capitalization
Category
Market Capitalization Category
Components Small Medium Large
WM VI WM VI WM VI
1. Customers 0.52 V 0.55 V 0.67 V
2. Products / Services 0.94 V 1.05 V 0.50 V
3. Markets 0.22 A 0.25 A 0.50 V
4. Technology 0.34 A 0.15 A 0.00 A
5. Concern for Growth / Survival 0.76 V 0.85 V 1.00 V
6. Philosophy 1.12 V 1.15 V 1.33 V
7. Self Concept 1.14 V 1.25 V 0.67 V
8. Public Image 0.88 V 0.85 V 1.33 V
9. Employees 0.62 V 0.85 V 0.83 V
All Components 0.73 V 0.77 V 0.77 V
Legend: Weighted Mean and Verbal Interpretation: 0.00 – 0.49 = Absent (A)
0.50 – 1.49 = Vague (V)
1.50 – 2.00 = Specific (S)
Test of Significant Difference By Components:
Customers: p-value=0.227; Decision=Not Significant
Products / Services: p-value=0.576; Decision=Not Significant
Markets: p-value=0.641; Decision=Not Significant
Technology: p-value=0.184; Decision=Not Significant

Concern for Growth / Survival: p-value=0.957; Decision=Not Significant

Philosophy: p-value=0.581; Decision=Not Significant
Self-Concept: p-value=0.126; Decision=Not Significant
Public Image: p-value=0.845; Decision=Not Significant
Employees p-value=0.035; Decision=Significant; Tukey
Significant Pair of Means: S & M; S & L
All Components: p-value=0.39; Decision=Not Significant
Test of Significant Difference By Market Capitalization Category:

Small: p-value=0.000; Decision = Highly Significant
Tukey Significant Pair of Means: 1 & 6; 2 & 3;
3 & 8; 4 & 6; 4 & 7; 6 & 9; 7 & 9
Tukey Highly Significant Pair of Means: 3 & 6;
3&7
Medium: p-value=0.000; Decision = Highly Significant
Tukey Significant Pair of Means: 1 & 6; 3 & 8;
3 & 9; 4 & 8; 4 & 9; 5 & 7
Tukey Highly Significant Pair of Means: 1 & 7;
2 & 3; 2 & 4; 3 & 6; 3 & 7
Large: p-value=0.033; Decision = Significant
Tukey Significant Pair of Means: 4 & 6; 4 & 8
Specifically and more effectively in the statement. In addition to technology, “markets” is another
component that is absent from the mission statements of both small and medium capitalization
companies. Apparently, the subject companies overlooked the importance of articulating the
organization’s need to address geographical opportunities that may be present to them.
Further, the significant difference of the nine components by market capitalization was also tested. It
can be noted that there is no significant difference on the components of the three market capitalization
categories when these were compared. Despite the fact that the majority of the components were
vaguely stated making them not significantly different among the three market capitalization categories,
still the “employees” component was found out to be significant. A number of researches (Horvat,
Kedmenec, & Malbasic, 2010; David & David, 2003; Moin, et al., 2012) noted that the “employees”
component is often missing or given less priority in the mission statements of companies. Though
this component is often neglected, companies should value its inclusion in the mission statement
because the success of an organization cannot be achieved without employee acceptance; thus,
understanding and disclosing the appropriate approaches about human resource is necessary. Since the
employees component is stated in vague terms, the mission statement of companies with small market

capitalization reflects their apparent giving of less weight on the specificity of this component in their
crafted mission statement as opposed to the mission statement of companies with medium to large
capitalization. This may imply that some bigger companies give more premium in their treatment of
their employees than what smaller companies do. Also, it can be gleaned from the data that the nine
components are highly significant to companies with small and medium market capitalization while they
are significant only to companies with large market capitalizations. Considering the relevance of the
presence of the nine components in a good mission statement, still publicly-listed companies give
unequal importance on the inclusion of each of these nine components.
Using Tukey Post Hoc test, it was found out that the absence of markets and technology components in
the mission statement makes the difference in the results significant. This means that because the other
included components are in vague terms, markets and technology are not given much emphasis in the
mission statement. This is parallel to the study of Alawneh (2015) who concluded that these two
components are either not mentioned or have low degree of clarity in the mission statements of
Jordanian banking companies. The above finding also indicates the need for publicly-listed companies to
take into consideration the inclusion of these two components in formulating their mission statement
since they may greatly affect the total quality of the mission statement particularly in terms of their
thrust and commitment.
BASED ON BUSINESS SECTOR: Table 3 presents the mission statement content analysis of publicly-listed
companies by business sector. It was found out that the components of a good mission statement were
vaguely stated in all business sectors. This means that the mission statements of publicly-listed
companies were not properly crafted for they did not specify clearly the ideal components of a mission
statement. It was also noted that customers, markets and technology were not given priority in the
development of the mission statement of the sample publicly-listed companies in all business sectors. It
should be pointed out that all the nine components are very important in the strategic management
process of any organization. Also, the content of a firm’s mission statement does matter and could
represent a competitive advantage or disadvantage for a firm (Peyrefitte & David, 2006; Smith, Heady,
Carson, & Carson, 2001).

Table 3: Mission Statement Content Analysis of Publicly-Listed Companies by Business Sector

Business Sector
Mission Statement
A B C D E
Components
WM VI WM VI WM VI WM VI WM VI
1. Customers 1.00 V 0.40 A 0.45 A 0.50 V 0.46 A
2. Products/ Services 0.75 V 0.93 V 0.95 V 1.36 V 0.62 V
3. Markets 0.25 A 0.33 A 0.23 A 0.29 A 0.15 A
4. Technology 0.42 A 0.13 A 0.23 A 0.36 A 0.23 A
5. Concern for Growth/ Survival 1.08 V 1.13 V 0.36 A 0.79 V 0.92 V
6. Philosophy 1.33 V 1.27 V 1.00 V 1.14 V 1.08 V
7. Self Concept 1.42 V 0.87 V 1.18 V 1.21 V 1.00 V
8. Public Image 0.92 V 0.80 V 0.77 V 0.86 V 1.31 V
9. Employees 1.08 V 0.53 V 0.64 V 0.57 V 0.77 V
All Components 0.92 V 0.71 V 0.65 V 0.79 V 0.73 V
Legend: Weighted Mean and Verbal Interpretation: 0.00 – 0.49 = Absent (A)
0.50 – 1.49 = Vague (V)
1.50 – 2.00 = Specific (S)
Business Sector: A=Financials B=Holding Firms C=Industrial
D=Services E=Others (Mining and Oil, Property)
Test of Significant Difference By Components:
Customers: p-value=0.09; Decision=Not Significant
Products / Services: p-value=0.80; Decision=Not Significant
Markets: p-value=0.63; Decision=Not Significant
Technology: p-value=0.85; Decision=Not Significant
Concern for Growth / Survival: p-value=0.35; Decision=Not Significant
Philosophy: p-value=0.24; Decision=Not Significant
Self-Concept: p-value=0.51; Decision=Not Significant
Public Image: p-value=0.23; Decision=Not Significant
Employees p-value=0.39; Decision=Not Significant
All Components: p-value=0.39; Decision=Not Significant
Test of Significant Difference By Business Sector:
Sector A: p-value=0.000; Decision=Highly Significant; Tukey Significant Pair of
Means: 3 & 5; 3 & 6; 4 & 6; 4 & 7
Sector B: p-value=0.000; Decision=Highly Significant; Tukey Significant Pair of
Means: 1 & 6; 2 & 4; 3 & 5; Tukey Highly Significant Pair of Means:3 & 6
Sector C: p-value=0.000; Decision=Highly Significant; Tukey Significant Pair of
Means: 1 & 7; 2 & 3; 2 & 4; 3 & 6; 5 & 7; Tukey Highly Significant Pair of
Means:3 & 7; 4 & 7
Sector D: p-value=0.001; Decision=Significant; Tukey Significant Pair of Means: 2
& 3; 2 & 4; 3 & 7
Sector E: p-value=0.000; Decision=Highly Significant; Tukey Significant Pair of
Means: 3 & 6; 3 & 8; 4 & 8

Moreover, it can be deduced from Table 3 that there is no significant difference on the content of
mission statements of the subject companies when grouped according to business sector. Hence, there
is no difference on the presence of the nine components whether one belongs to financials, holding
firms, etc. As can be noted in the analysis of their mission statements, the subject-companies have
generally stated the components in vague terms. This means that whether these companies actually
consider the relevance of those components, these are not clearly indicated in their mission statement
documentation.
On the other hand, it can be noted that the components of mission statement are highly significant to
those companies belonging to financial, holding firms, industrial and others (mining, oil and property)
while significant only to services business sector. This means that in crafting mission statements,
different levels of importance is given on each of the nine components. Further, using Tukey Post Hoc
test, it was found out that the reason for the significant to highly significant difference results is the
absence of several components in the mission statement of the publicly-listed companies when grouped
according to business sector. Among those are markets and technology, which are similar also to the
missing components when the companies are grouped according to market capitalization. Customer is
another important component which is found missing from the mission statements of the majority of
the companies under the different business sectors. This relates with the study of Arefin, Rajib, and
Bhuiyan (2011) who also indicated that this component is missing from the mission statements of
pharmaceutical firms in Bangladesh. It must be noted that one of the major reasons for developing a
business mission is to attract customers who give meaning to an organization and therefore, a clear
identification of the customers that the organization intends to serve or satisfy is a must. While the
majority of the components are vaguely stated, these three components – markets, technology and
customers, are not even considered most of the times. With the given importance of all the components
in the mission statement, the inclusion of these components is necessary so that companies could
effectively communicate the clear focus of their strategic directions.
REGARDLESS OF CLASSIFICATION: The mission statement content analysis of publicly-listed companies,
regardless of market capitalization and business sector, is presented in Table 4 where it is shown that
there is a highly significant difference on the nine components as presented in the mission statements

of the companies. This means that there are several components which are presented in vague terms
while some are ignored like markets and technology.
In general, the current mission statements of the publicly-listed companies, regardless of classification,
fail to provide clear direction and lack the needed specificity components of a well-crafted mission
statement. In this regard, the companies are advised to include the nine components in the revision of
their mission statements. Relevant to the finding, Desmidt and Heene (2014) believe that the features of
properly crafted mission statement help businesses to realize their purpose that will eventually manifest
in their growth and profitability statistics.
Table 4: Mission Statement Content Analysis of Publicly-Listed Companies (Regardless of Market
Capitalization and Business Sector)
All Companies
Mission Statement Components
WM VI
1. Customers 0.54 Vague
2. Products/ Services 0.93 Vague
3. Markets 0.25 Absent
4. Technology 0.26 Absent
5. Concern for Growth/ Survival 0.80 Vague
6. Philosophy 1.13 Vague
7. Self Concept 1.14 Vague
8. Public Image 0.89 Vague
9. Employees 0.71 Vague
All Components 0.74 Vague
Legend: WM Scale Ranges: 0.00 – 0.49 = Absent 0.50 – 1.49 = Vague 1.50 – 2.00 = Specific
Test of Significant Difference:

p-value =0.000; Decision=Highly Significant; Tukey Significant Pair of Means: 1 & 2; 1 &
8; 3 & 9; 4 & 9; 7 & 9; Tukey Highly Significant Pair of Means:1 & 6; 1 & 7; 2 & 3;
2 & 4; 3 & 5; 3 & 6; 3 & 7; 3 & 8; 4 & 5; 4 & 6; 4 & 7; 4 & 8
READABILITY OF THE MISSION STATEMENTS: Table 5 shows the mission statement readability level of
publicly-listed companies using the Gunning Fog Index (GFI) scoring. It summarizes that whether the
companies are grouped according to market capitalization category or business sectors, their readability
level is almost the same. It can be seen that the GFI ranges from 17-24 (an average of 22) when
companies are grouped according to market capitalization and business sector. This implies that it takes

22 years of formal schooling to easily understand the mission statement in one reading. This study also
found out that the mission statements of the publicly-listed companies are not that very readable since
a GFI of 22 considers the reading skills of a post graduate (Doctoral degree holder) stakeholder to be
able to fully comprehend the message of the mission statement. While the companies have
stakeholders of varied levels of academic achievements, the crafted mission statement should have
lower GFI to be able to cater to all levels of reading comprehension. With the presumption that the
majority of the stakeholders are not doctoral degree holders, then their crafted mission statements are
not generally readable.
Table 5: Mission Statement Readability Level (Gunning Fog Index) of Publicly-Listed Companies
Gunning Fog Index
Market Capitalization Category (GFI) ANOVA
Small 22.10 p value = 0.591;
Medium 21.65 Decision: Not Significant
Large 19.36
Gunning Fog Index

Business Sector (GFI) ANOVA
Financials 23.17
Holding Firms 22.37 p value =0.191;
Industrial 17.30 Decision: Not Significant
Services 23.73
Others (Mining and Oil, Property) 24.48
Average Fog Index (All Companies): 22.00
This finding is not an isolated case as this error is most commonly committed in writing mission
statements where the aspect of readability suffers. In the study conducted by Ahmed, Shaukat, and
Islam (2013), the researchers found out that stakeholders need an average of 17 years of formal
education to understand the mission statement of Islamic banks. They further indicated that it is not
possible that all stakeholders of these banks could easily read and understand the mission statement
considering their levels of educational qualification. Also, Sattari, Pitt, and Caurana (2011) pointed out
that the mission statements of the randomly sampled 100 firms in the Fortune 500 annual rankings were
not that readable, and that in the case of many of them, the mission statements assumed the readings
skills of a university graduate. Inasmuch as the company wants to include all the components of a good

mission statement providing a clear guidance to different constituencies, the crafted mission statements
most often become confusing, conflicting and ultimately, difficult to understand.
Furthermore, the study also reveals that whether the companies are grouped according to their market
capitalization or business sector, there exists no significant difference relative to their mission statement
readability. This means that publicly-listed companies similarly failed to take into consideration the
significance of the readability aspect of their mission statements. Therefore, there is a need for publicly-
listed companies to revisit their mission statements to make them readable and understandable to a
wider range of stakeholders.
RELATIONSHIP OF CONTENT ANALYSIS AND READABILITY OF MISSION STATEMENTS OF PUBLICLY-
LISTED COMPANIES WITH MARKET CAPITALIZATION:
The study also analyzed the correlation between the content analysis and readability and market
capitalization of publicly-listed companies which is shown in Table 6. It was found out that the
components and the readability of mission statements have no correlation with that of market
capitalization. This suggests that even though the nine components are not clearly stated and the
readability indexes of the mission statements are too high, these do not affect the value of the market
capitalization of the publicly-listed companies. This implies that the absence or presence of mission
statement components and/or its readability aspect are not predictors of the subject-companies’
amount of market capitalization. This finding is supported by the study of Alawneh (2015) who
concluded that there is no strong positive relationship between the components of mission statement
and performance in the Jordanian banking industry. A similar study by Barktus, Glassman, and McAfee
(2006) indicated that there is no direct association between the components of mission statement and
the financial performance of the selected companies listed in the 2001 Fortune Global 500.
Table 6: Correlation Analysis between Content Analysis (Mission Statement Components) and
Readability (Gunning Fog Index) and Market Capitalization of Publicly-Listed Companies
Items r-coefficient Interpretation
Mission Statement Components
1. Customers 0.059 No Correlation
2. Products/ Services -0.119 No Correlation
3. Markets 0.077 No Correlation
4. Technology -0.212 No Correlation
5. Concern for Growth/ Survival 0.029 No Correlation

6. Philosophy 0.021 No Correlation

7. Self Concept -0.197 No Correlation
8. Public Image 0.064 No Correlation
9. Employees 0.032 No Correlation
Gunning Fog Index -0.090 No Correlation
Table 7 further supports the correlation data in Table 6. It reveals that the R square value is 0.129 which
means that the regression model indicates 12.9% of the variance in market capitalization. In addition,
the p-value of 0.448 is not significant and therefore, the components and the readability of mission
statement are not predictors of market capitalization as also indicated in Table 6. Despite this, a
regression equation is developed to further support the above finding. The regression equation
estimates the relationship between the independent variables (components and readability of mission
statement) and the dependent variable (market capitalization). These estimates tell the amount of
increase in market capitalization that would be predicted by a one unit increase in the predictor. (Note:
For the independent variables which are not significant, the coefficients are not significantly different
from 0, which should be taken into account when interpreting the coefficients). For example,
Component 1 (Customers) has the coefficient (parameter estimate) of 17.172. Therefore, for every unit
increase in Component 1, 17.172 unit increases in market capitalization is predicted, holding all other
variables constant. However, this is not significantly different because the p-value is greater than 0.05.
Table 7: Regression Analysis between Content Analysis (Mission Statement Components) and
Readability (Gunning Fog Index) and Market Capitalization of Publicly-Listed Companies
Unstandardized Standardized
Model Coefficients Coefficients T Sig
B Std. Error Beta
(Constant) 191.184 72.788 2.627 0.011
1. Customers 17.172 42.113 0.052 0.408 0.685
2. Products/
-9.7490 35.294 -0.035 -0.276 0.783
Services
3. Markets 57.852 43.465 0.173 1.331 0.188
4. Technology -53.024 42.250 -0.154 -1.255 0.214
5. Concern for
-0.3420 33.692 -0.001 -0.010 0.992
Growth / Survival
6. Philosophy 10.645 51.341 0.033 0.207 0.836
7. Self Concept -83.226 42.272 -0.287 -1.969 0.053
8. Public Image 34.845 34.745 0.142 1.003 0.320

9. Employees 19.136 35.218 0.081 0.543 0.589

GFI -1.365 2.527 -0.070 -0.540 0.591
Combined Effects of the Mission Statement Components and Gunning Fog Index with Market
Capitalization:
R = 0.358
R2 = 0.129 or 12.9%
F change = 0.959
Sig F change = .448 (not significant)
Regression Equation:
Ypredicted = b0 + b1*x1 + b2*x2 + b3*x3 + b4*x4 + b5*x5 +…+bgfi*xgfi
CAPpredicted = 191.184 + 17.172*x1 + -9.75*x2 +…+-1.37gfi
4. CONCLUSIONS AND DIRECTION FOR FUTURE USE:

The majority of the publicly-listed Philippine companies have small market capitalization and most of
them belong to the industrial business sector. Results of the content analysis revealed that markets and
technology are the common components that are not present in the current mission statements of
publicly-listed companies while the rest of the components are stated only in vague terms. The vague
presentation of the mission statement of the companies relative to the needed components implies that
these organizations are still in their developing stage relative to the use of strategic management
process towards organizational effectiveness and efficiency. The study also found out that there is no
significant difference in both the market capitalization and business sector groupings as to the
conformance of the companies to each of the nine components of the mission statements. However,
the result showed that there is a highly significant difference on the comparison of the nine components
in both groupings.
On the aspect of readability of the mission statements of publicly-listed companies, the study found out
that the mission statements are very difficult to read and require revision so they can be better
understood. A stakeholder needs to be a Doctoral degree holder to better understand the current
mission statement. Considering that the mission statement is a corporate communication tool targeting
broad-based audiences, the findings may also suggest that transparency may be compromised if the

mission statements are not readable. The study also proves that components and readability of the
mission statements are not predictors of the value of market capitalization of publicly-listed companies.
Based on the conclusions drawn, the subject publicly-listed Philippine companies need to review and
revise their respective mission statements taking into consideration the nine components indicated in
this study. The components that are written in vague terms should be improved in order to express
exactly what the companies really hope to achieve. Further, the companies should give importance to
the inclusion of markets and technology in developing their mission statement to further maintain their
competitive advantage in the industry sectors they belong to. It is also recommended that the nine
components of an effective and valuable mission statement be written taking into consideration not
only the management context perspective but also other stakeholders’ perspectives (especially
customers and investors) whenever appropriate. Likewise, the aspect of readability should be
considered in the revision by reducing sentence length and the use of multi-syllabic words for easy
understanding of its message to all stakeholders. In addition to the text to be used, the target readers
(stakeholders) should be considered because they may have different levels of education and
sophistication. The theoretical foundation and content analysis provided in this article could serve as
guide for researchers and practitioners going forward. Further research relating the quality of mission
statements and market capitalization of stock companies is encouraged to further validate the results of
this initial undertaking.

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Appendix A
Market Capitalization of Sampled Companies (in Billion Pesos – As of 5/15/16)
n = 76
Small Category:
Market Capitalization in Billion
Company Sector Pesos (As of 5/15/16)
1 Financials 2.35
2 Holding Firms 0.33
3 Others (Mining and Oil, Property) 0.99
4 Financials 6.75
6 Financials 0.73
8 Services 0.42
9 Financials 0.81
12 Services 1.99
13 Industrial 4.38
14 Industrial 0.40
15 Financials 8.05
16 Services 4.95
17 Industrial 7.76
18 Services 0.84
19 Services 7.42
20 Industrial 1.52
21 Industrial 0.28
23 Services 0.44
24 Services 3.54
25 Industrial 7.61
27 Services 3.45
29 Industrial 4.15
31 Financials 22.28
33 Services 50.39
34 Industrial 47.17
35 Financials 73.78

37 Industrial 10.31
38 Industrial 14.73
39 Industrial 12.73
40 Services 53.57
41 Services 54.51
42 Industrial 92.91
44 Financials 11.54
48 Industrial 31.73
50 Industrial 20.60
Average 16.35
Medium Category:
Market Capitalization in Billion
Company Sector Pesos (As of 5/15/16)
3 Financials 263.00
4 Industrial 102.75
5 Services 377.23
6 Services 112.25
8 Financials 135.64
9 Financials 365.41
10 Industrial 445.90
11 Financials 373.29
19 Services 116.42
Average 237.42

Large Category:
Company Sector Market Capitalization in Billion

Pesos (As of 5/15/16)
1 Financials 827.71
Average 655.94


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Asia Pacific Journal of Research in Business Management

Vol. 8, Issue 2, February 2017 Impact Factor: 5.16, ISSN: (2229-4104)

CONTENT AND READABILITY OF THE MISSION STATEMENTS OF PUBLICLY-LISTED PHILIPPINE

Dr. Jesus P. Briones, FBE

Dr. Doringer P. Cabrera, CPA, AFBE

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 59

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 60

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 61

4. Technology – Is the firm technologically current?

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 62

3. RESULTS AND DISCUSSION:

Business Sector Frequency Percentage

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 63

CONFORMANCE TO THE COMPONENTS OF THE MISSION STATEMENTS:

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 64

Concern for Growth / Survival: p-value=0.957; Decision=Not Significant

Test of Significant Difference By Market Capitalization Category:

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 65

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 66

Table 3: Mission Statement Content Analysis of Publicly-Listed Companies by Business Sector

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 67

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 68

Test of Significant Difference:

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 69

Gunning Fog Index

Average Fog Index (All Companies): 22.00

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 70

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 71

6. Philosophy 0.021 No Correlation

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 72

9. Employees 19.136 35.218 0.081 0.543 0.589

Ypredicted = b0 + b1*x1 + b2*x2 + b3*x3 + b4*x4 + b5*x5 +…+bgfi*xgfi

CAPpredicted = 191.184 + 17.172*x1 + -9.75*x2 +…+-1.37gfi

4. CONCLUSIONS AND DIRECTION FOR FUTURE USE:

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 73

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 74

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 75

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 76

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 77

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 78

Company Sector Market Capitalization in Billion

An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Page 79

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Ypredicted = b0 + b1x1 + b2x2 + b3x3 + b4x4 + b5x5 +…+bgfixgfi

CAPpredicted = 191.184 + 17.172x1 + -9.75x2 +…+-1.37gfi