business purpose

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""There is only one valid definition of business purpose: to create a customer."" -- Drucker, Peter F., (1973, 1974), Management: Tasks, Responsibilities, Practices, Harper & Row, pg 61

Russell L. Ackoff's (1981, pp 30-45) general purpose of a business:

  • Production of wealth
  • Distribution of income (significantly via employment)
  • Equitable (not equal) distribution of income
  • Serve stakeholders

""...a social structure that brings together human beings in order to satisfy economic needs and wants of a community"" (Peter F. Drucker, 1993 Introduction to the Concept of the Corporation, 1946).

Exploration and definition of a business organization's specific purpose is one of the most critical aspects of the strategic management process. A clear and compelling purpose is essential to unify the design of a business organization. Amongst other things, purpose is essential to forming a strategic focus and strategies.