The team sponsor (product/project manager) either gives or works with the team to define its mission or objectives based on a project/product need. This is documented in the form of a team charter.
A charter is…
A declaration or document setting forth the aims and principles of a group
Webster’s New World Dictionary
A team charter is a clear description of the team’s mission, as well as the authority and resources provided to accomplish that mission. The charter typically includes a statement of mission, objectives or statement of work; background; authority or boundary conditions (scope, constraints, resources, and schedule); membership; requirements or specifications, and interface responsibilities. (See team charter example.)
The charter should be specific enough to get the team started in the right direction, but not so limiting as to dictate process or outcome at the outset. Teams will establish more specific goals and plan once they comprehend the scope of their work, and the original charter may be re-negotiated with the sponsor.
At The Outset: Confusion, conflicts, or disagreements about the charter must be resolved to the mutual satisfaction of the team and sponsor as soon as possible. Negotiate to change the initial mission, broaden or narrow its scope, or shift its focus. The team charter provides a common vision that keeps a team focused on its objective.
During the Project: the charter: