> These is much written on what the true purpose of an organization is.
Some of my favourites:
Charles Handy: 'What is a company for?' RSA Journal 1990?
Arie de Geus: 'Companies: what are they?' RSA Journal No.5460
June 1995
> Harvard Business Review has had numerous articles on this subject. On
> stands out to me. It was by Christopher A. Bartlett and Sumantra Ghoshal,
> "Changing the Role of Top Management: Beyond Strategy to Purpose."
HBR September-October 1996 contains: James C Collins & Jerry L
Porras: 'Building your company's vision'. They summarise and progress
from their' 1994 book: 'Built to last: Successful Habits of Visionary
Companies [Harper Business]. In addressing this issue of company
purpose they distinguish between 'core ideology', 'core values' and
'core purpose'.
>As David Packard said something like profits are like
> the air you breathe or the food you eat, they are necessary but it is
>not the joi de vie.
In their article, Collins and Porras also quote from a speech (the
same speech?) given to Hewlett Packard's training group on 8 March 1960
by David Packard co-founder of Hewlett Packard.
This section sums up my views:
"a group of people get together and exist as an institution that we
call a company so they are able to accomplish something collectively
that they could not accomplish separately - they make a contribution to
society, a phrase which sounds trite but is fundamental....
"... the underlying drives come not so much from making money but
largely from a desire to make a product, to give a service - generally
to do something which is of value."
As Packard implies, companies are part of society and must behave
responsible to society.
Here's my summary of the purpose of corporations:
A company harnesses and uses resources, their own and others' - human,
financial, physical, intellectual - in order to produce and deliver goods
and services to customers that are willing and able to pay for these
products. The company needs to establish sustainable, reciprocal
relations with customers, suppliers and the communities in which it
operates. These are often and sometimes controversially called
'stakeholders'. In this context I include all employees as suppliers (of
labour, intellect, hearts and minds). I also include as suppliers lenders
- and shareholders who supply capital and are thereby entitled to the
rewards (residual profits) when all other financial obligations have been
met. If internal and external relationships are learning and trusting
relationships the climate exists to create more value and thus to
apportion more wealth to all stakeholders than if these relationships are
adversarial.
This is the concept of the 'inclusive' Company proposed by the
'Tomorrow's Company' Inquiry, which reported its findings in June 1995.
It is published by the RSA.
RSA (known familiarly as the Royal Society of Arts) is
the Royal Society for the encouragement of Arts, Manufactures
and Commerce (founded in London in 1754),
8 John Adam Street London WC2N 6EZ
e-mail: rsa@rsa.ftech.co.uk
web site: http://www.cs.mdx.ac.uk/rsa/
--John Farago <jfarago@cix.compulink.co.uk>
Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>