The Concepts of Purpose and Vision

Topics: Paradigm shift, Paradigm, Strategic planning Pages: 16 (5242 words) Published: August 13, 2011
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 Strategies for Taking Charge", identify Vision as a concept central to their theory of leadership. "To choose a direction, a leader must first develop a mental image of a possible and desirable future state of the organisation. This image, which we call vision, may be as vague as a dream or as precise as a goal statement.

The critical point is that Vision articulates a credible, realistic attractive future for the organisation". (Own emphasis)

Robert H. Miles, in an article entitled "Corporate Transformation", states that all successful transformations are Vision led. He defines Vision in the following way: "It requires projection into a dimly outlined future. It requires the creation of goals that stretch the organisation beyond its current comprehension and capabilities". (Own emphasis)

Stephen R. Covey stresses the symbiotic relationship between Vision and Values in an article called Ethical Vertigo published in Executive Excellence, 1997.

The Book of Proverbs warns us: "Where there is no Vision, people will perish", while Martin Luther King demonstrated the power of Vision when he immortalised his Vision with the words, "I have a dream", and unleashed forces that changed a nation.

Quigley (1994) defines corporate values as "the rules or guidelines by which a corporation exhorts its members to behaviour consistent with its order, security, and growth ... Values and beliefs are the most fundamental of the three elements of Vision". (Own emphasis)

It is true to say that most Vision statements express an element of ambition. Whether it is to be "bigger than", to "go from number two to number one", or even "to be the best", an element of achievement is always present. Komatsu set out to "encircle" Caterpillar (David vs Goliath): Canon sought to "Beat Xerox": Panasonic has "the quest for zero defect", while Cray Computers "manufactures the best computers in the world".

It is obvious from the discussion so far that a Vision is more than unfettered...
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