Business purpose refers to the wider, long-term goals of a commercial enterprise. It expresses the corporate's reason for existing, its particular commitment with respect to the surrounding world. A business purpose statement serves as an affirmative reminder of the company’s core identity to employees, customers, and other stakeholders; a common ground hopefully enabling them to focus on their particular tasks while feeling what they do is part of a wider, socially valued endeavor. Alongside established normative, purpose is a fundamental component of

business ethics Business ethics (also known as Corporate Ethics) is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business co ...

and is closely related to corporate statements such as vision, mission, and values. A simplifying, although debatable view, contends that business purpose may exist in one of two forms: current purpose, or mission; and future purpose, or vision. The term has gained wide media attention in recent times.

History

Aristotle Aristotle (; grc-gre, Ἀριστοτέλης ''Aristotélēs'', ; 384–322 BC) was a Greek philosopher and polymath during the Classical period in Ancient Greece. Taught by Plato, he was the founder of the Peripatetic school of phil ...

contemplated the importance of

and business purpose in his

Nicomachean Ethics The ''Nicomachean Ethics'' (; ; grc, Ἠθικὰ Νικομάχεια, ) is Aristotle's best-known work on ethics, the science of the good for human life, which is the goal or end at which all our actions aim. (I§2) The aim of the inquiry is ...

, where he describes the moral and intellectual traits accompanying virtuous human behavior in society. Also in his

Politics Politics (from , ) is the set of activities that are associated with making decisions in groups, or other forms of power relations among individuals, such as the distribution of resources or status. The branch of social science that studies ...

, where he discerns between "productive knowledge" and the political abilities required for "good wealth" acquisition. Other classic philosophers cited for dealing with matters relevant to the purpose of business are Kierkegaard,

David Hume David Hume (; born David Home; 7 May 1711 NS (26 April 1711 OS) – 25 August 1776) Cranston, Maurice, and Thomas Edmund Jessop. 2020 999br>David Hume" ''Encyclopædia Britannica''. Retrieved 18 May 2020. was a Scottish Enlightenment philo ...

, and Nietzsche. Ideas on the purpose of business have evolved and undergone deep revision in the present era. Early modern discussion on business purpose doctrine took place in mid-20th century in the context of its relevance to tax-saving provisions in the US

Internal Revenue Code The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 ...

. In 1964, American businessman

Frederick Kappel Frederick Russell Kappel (1902–1994) was an American businessman.Kenneth N. Gilpin ''The New York Times'', November 12, 1994. He served as the 9th President of Western Electric from January 1954 until September 1956. He later served as chairm ...

published a volume containing a selection from his speeches dealing with the theme and its relation to performance. The advent of social responsibility theories in the 1960's brought about demands for businesses to widen the scope of their beneficiaries to include actors beyond the owners themselves, and for companies to share with the state the economic burden of attending social needs in the communities related to their areas of operation. A plethora of books covering the importance of corporate purpose have been published in recent times, among them '' Purpose: The Starting Point of Great Companies'' by Nikos Mourkogiannis in 2006, ''Start with Why'' by

Simon Sinek Simon Oliver Sinek (born October 9, 1973) is a British born American author and inspirational speaker. He is the author of five books, including ''Start With Why'' (2009) and ''The Infinite Game'' (2019). Early life and education Sinek was bor ...

in 2009, ''Conscious Capitalism'' by John Mackey and Rajendra Sisodia in 2014, ''Good is the new Cool'' by Afdhel Aziz in 2021, and ''Deep Purpose'' by

Ranjay Gulati Ranjay Gulati is an Indian-American organizational scholar and currently the Paul R. Lawrence MBA Class of 1942 Professor of Business Administration at the Harvard Business School. Early life Ranjay Gulati graduated from St. Stephen's College a ...

in 2022. In their book '' Net Positive'' Paul Polman and Andrew Winston provide many examples of purpose-driven organizations, including

Unilever Unilever plc is a British multinational consumer goods company with headquarters in London, England. Unilever products include food, condiments, bottled water, baby food, soft drink, ice cream, instant coffee, cleaning agents, energy drink, t ...

of which Polman was CEO from 2009 to 2019. Schreuder (2022) sketches the evolution of

corporate social responsibility Corporate social responsibility (CSR) is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethicall ...

over the last four decades from Do No Harm to Net Positive or even Max Positive and provides the case of Royal DSM as illustration.https://www.academia.edu/91893819/People_Planet_Profit_and_Purpose_from_PhD_to_DSM_Practice

References

Statements Business terms Strategic management {{business-term-stub

History

Further reading

References