Friday, November 22, 2013

The Real Corporate Persona

Peter Drucker in his 1954 book The Practice of Management identified
eight areas in which an enterprise should have clearly defined goals or objectives:
  1. Market standing
  2. Innovation
  3. Productivity
  4. Physical and financial resources
  5. Profitability
  6. Manager’s performance and development
  7. Worker’s performance and attitude
  8. Public responsibility
Does the inclusion of public responsibility surprise you? It should not. The beauty of Drucker’s list is that it belies the image of the "evil corporation." Based on my experience, his list reflects the real-life mindset of the modern corporate leader. Modern business leaders are concerned with more than profits. They are concerned about their role in the community. They are major contributors—both directly and indirectly—to education, the arts, and the needy. They are concerned about the development and well-being of their employees. They create “better living” through innovations. They are the source of income for every single citizen. Even those employed by the government owe their income to taxes paid by commercial enterprises or by those employed by, or invested in, commercial enterprises.
 
As important as Drucker’s list of eight key results areas is, the more profound observation of this 1954 book is that there is only one valid purpose for the existence of a business. It is to create a customer. The only thing that provides a business the opportunity for success is a customer who pays and decides what is important. Everything else, including its internal structure, controls, organization, and procedures, is just expense. All those things, everything else in the business, exist for the sole purpose of serving the customer.
 
Those who tend to view the corporation less favorably will ask, “How can a profit requirement exist for the sole purpose of serving the customer?” Profit is necessary to attract the capital needed to provide the product or service wanted by the customer. Without the customer, there would be no need for capital. Without the customer, there would be nothing to attract the capital.
 
Having said the above, there are bad apples—but they are the exception, not the rule.
 
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Mysteries by Tom Collins include Mark Rollins’ New CareerMark Rollins and the RainmakerMark Rollins and the Puppeteer and the newest, The Claret Murders. For signed copies go to http://store.markrollinsadventures.com. Print and ebook editions are available from Amazon, Barnes & Noble and other online bookstores. The ebook edition for the iPad is available through Apple iTunes' iBookstore.

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