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The Concepts of Purpose and Vision

Why does the company exist?
Who should benefit most from all the effort that is put into the company? Why should a manager or an employee do more than the minimum required? Who owns the company?

These questions are deeply philosophical and spiritual, sometimes evoking long and acrimonious debate.

The debate appears to resolve itself into three broad categories that vary from the materialistic and selfish at one end of the spectrum to the more altruistic at the other.

Firstly, there are those who claim that the company exists for the benefit of the owner or shareholders. "Maximisation of shareholders' value" is a phrase often quoted by managers and academics that hold this viewpoint. (See Rappaport, 1986 )

Most managers and academics, however, have rejected this single - minded approach. They do not believe that the company's only purpose is to create wealth for the owners or shareholders. They acknowledge the claims of other stakeholders such as customers, employees, suppliers and the community. The second view of the company's purpose, therefore, is that it exists to satisfy in more than a material sense all its stakeholders. (Stakeholder theory: Pearce and Robinson, 1991)

The third viewpoint aims at identifying a purpose that is greater than the combined needs of the stakeholders, and something to which all the stakeholders can feel proud to contribute. They aim towards a higher ideal. At The Body Shop, a retailer of cosmetics, the managers promote "products that do not hurt the environment". Matsushita maintain they only manufacture products that will enhance the quality of life of the Japanese people. It is clear that, in these companies, each stakeholder can feel that the company supports some goal at a level higher than the monetary, a goal which reaches out to a wider audience, and even to society as a whole. Vision

Warren Bennis and Burt Nanus, authors of "Leaders: The...
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