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Business purpose refers to the wider, long-term goals of a commercial enterprise. It expresses the corporate's reason for existing, its particular commitment 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, hopefully a common ground 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 and is closely related to corporate statements such as vision, mission, and values. A simplifying, although debateable 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 contemplated the importance of business ethics and business purpose in his Nicomachean Ethics, where he describes the moral and intellectual traits accompanying virtuous human behavior in society. Also in his Politics, 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 Kant, Kierkegaard, David Hume, and Nietzsche.

VIEW:https://www.researchgate.net/publication/267634528_Political_Corporate_Social_Responsibility_Reviewing_Theories_and_Setting_New_Agendas

https://www.researchgate.net/publication/353403254_Neoliberal_governance_evaluations_and_the_rise_of_win-win_ideology_in_corporate_responsibility_discourse_1960-2010

Ideas on the purpose of business have evolved and undergone in-depth 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. In 1964, American businessman Frederick Kappel 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.

CSR theories were confronted by Milton Friedman in 1970 in a widely publicised article, originally published in the New York Times Magazine, where he categorically contends that the one and only social responsibility of business is to increase its profits so long as it stays within the rules of the game without deception or fraud. Although controversial, such views by Friedman received ample support from liberal quarters throughout the late 20th century; for instance by British philosopher Elizabeth Vallance in 1993, and later on by Henderson, in his book "Misguided Virtue: False Notions of Corporate Social Responsibility." Excluisive, shareholder-centered ideas of business purpose were subsequently challenged by authors like Drucker in 1985, and Carson in 1999, who questioned the limitations of Friedman's perspective, contending that, since a firm is made up of people to serve other people, the purpose of a business must also englobe the company's responsibilities towards people, clients, shareholders, and society at large. Despite passionate dispute on the letigimacy of CSR, compromising, midway positions eventually made their way to reconcile extremes.

Departing somewhat from the above dispute, the first books entirely devoted to the purpose of businesses in the 21st century were those by Richard R. Ellsworth in 2002, and Nikos Murkogiannis in 2006; the first one of them (Leading with Purpose: The New Corporate Realities) purporting a customer-focused corporate purpose; the second book (Purpose: The Starting Point of Great Companies) emphasizing the core forces behind sustained business purpose: a strong moral code, in alignment with a distinct call for achievement, competitiveness and leadership among the founding fathers of the corporation considered. A plethora of other books dealing with the importance of corporate purpose have followed, such as Start with Why by Simon Sinek 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 in 2022.

Further reading

• Drucker, Peter F. (1985). Business Purpose and Business Mission, in "Management: tasks, responsibilities, practices" (1st ed.). New York: Harper & Row. pp. 74–94. ISBN 978-0060110925.

• Ellsworth, Richard R. (2002). Leading with purpose : the new corporate realities. Stanford: Stanford Business Books. ISBN 0-8047-4385-1.

• Mourkogiannis, Nikos (2006). Purpose : the starting point of great companies (1st ed.). New York: Palgrave. ISBN 1-4039-7581-7.
• Duska, Ronald F. (2007). Contemporary reflections on business ethics. Dordrecht, the Netherlands: Springer. ISBN 978-1-4020-4984-2. OCLC 209942380.
• Spence, Roy (2011). It's not what you sell, it's what you stand for : why every extraordinary business is driven by purpose. Haley Rushing. New York, N.Y.: Portfolio/Penguin. ISBN 978-1-59184-447-1. OCLC 751805918
• Mackey, John and Raj Sisodia (2014). Conscious capitalism : liberating the heroic spirit of business. Boston, Mass.: Harvard Business Review Press. ISBN 1-62527-175-1.

"Collins and Porras (1994) observe, “profitability is a necessary condition for existence and a means to more important ends, but it is not the end in itself for manyof the visionary companies. Profit is like oxygen, food, water, and blood for the body;they are not the point of life, but without them, there is no life”

(Collins & Porras, 1994; Basu, 1999; Ellsworth, 2002)

Motives, are quite different from purposes. Motives are the psychological forces that “move” individuals. "Motivation is the reason for which humans and other animals initiate, continue, or terminate a behavior at a given time" Those who argue that the primary purpose of corporations is to seek profits, or to maximize shareholder wealth, have confused purpose with motive (Duska,1997). "Businesses as human institutions are established in order to better society through the production of goods and services and the advancement of knowledge....companies with a purpose enable people to live better lives; they positively contribute to society in one way or another." "This may mean producing drugs that cure illnesses, means of transportation that facilitate travel, educational materialthat enables learning, or other types of products and services that improve society." "Profits drive executives and other employees to compete in the marketplace, but they do not define the reason for which companies exist." (Freeman)

See also:

Business ethics

Friedman doctrine

Stakeholder theory

Utilitarianism

NOTES:

• Business Roundtable: In August 2019, the Business Roundtable stated that the purpose of businesses must be to deliver value to all stakeholders customers, employees, suppliers, society, and shareholders.https://www.businessroundtable.org/purposeanniversary
• Rethinking the Purpose of theCorporation: Challenges From Stakeholder Theory R. Edward Freeman, Karim Ginena 2015 , notizie di Politeia, XXXI, 117, 2015. ISSN 1128-2401 pp. 9-18 https://www.researchgate.net/publication/283435449_Rethinking_the_purpose_of_the_corporation_Challenges_from_stakeholder_theory

1. "why purpose is important for organizations" "to what extent is purpose relevant to the day-to-day operations of organizations?" "hartman (1996) defines organization as “a network of implicit and explicit arrangements andagreements among the participants, who have their separate reasons for signing on”
2. " a new story of business is emerging around the world." "The old story that the purpose of business is to make profits for financiers is only partially helpful, and it often gets in the way of leading a great business in the 21 stCentury."
3. "purposes that go beyond profits actually work better, since they are often inspirational for employees and other stakeholders" "People take pride in working for their companies and form new social bonds with others as result of their affiliation with thisor that corporation." " It is purpose that allows individuals to align themselves with something bigger than themselves in an effort totransform society for the better using a collective goal as a means of focus. “Purpose makes employees feel their work is worthwhile and so maintains morale and energy levels. If effectively managed, it also guides their work, leading them to do things that create competitive advantage for the company” (Mourkogiannis, 2006: 25)." "The strong sense of purpose promotes confidence in short-term growth prospects for the organization" (Deloitte, 2014).
4. "Purposes can come in many shapes and flavors, as we argued in section 2 above"
5. "The interconnection Principle: Stakeholder interests are interdependent"

• Morkogiannis: "developing and deploying a clear and consistent organizational purpose"
• Peter Drucker: modern day Aristotle for the business community Marcia Kurzynski, Journal of Management 2009 10.1108/17511340910987293
  1. "When a manager becomes too devoted to financial success and perceives the monetary rewards of work and doing business as the ultimate measure of his success and worth as a person he, or she, loses perspective of the larger meaning and purpose of work"
  2. "MacIntyre was one of the first moral philosophers to propose a return to Aristotelian virtue-based ethics because of its focus on excellence (virtue), community, personal character, the individual, and external actions as a moral guide for action and decision making (MacIntyre, 1984). Philosopher Robert C. Solomon took MacIntyre’s thought one step further and proposed the Aristotelian model of virtue as a viable theory for business. Both suggest that Aristotle’s virtue ethics provide a rich account of moral qualities which could be applied in business since the virtues that Aristotle wrote about the most – courage, justice, prudence and temperance – with some effort, could be developed by anyone[2]."
  3. "the purpose must lie outside the business itself. In fact, it must lie in society, since a business enterprise is an organ of society"
• Solomon Robert C. (1992-07). "Corporate Roles, Personal Virtues: An Aristotelean Approach to Business Ethics". Business Ethics Quarterly. 2 (3): 317–339. doi:10.2307/3857536
  1. "Aristotle is the first business ethicist. According to Aristotle, one has to think of oneself as a member of the larger community and strive to excel, to bring out what is best in ourselves and our shared enterprise. What is best in us—our virtues—are in turn defined by that larger community, and there is therefore no ultimate split or antagonism between individual self-interest and the greater public good. The Aristotelian approach to business ethics, rather, begins with the two-pronged idea that it is individual virtue and integrity that count" 10.1177/0170840604042409
  2. "The Aristotelian approach to business ethics begins with the idea that it is individual virtua and integrity that counts; good corporate and social policy will follow suit."
  3. Contains a detailed discussion about the value of commonly praised human virtues for the sustainability of a corporation.

• Does Your Company Have A Real Corporate Purpose? https://www.forbes.com/sites/forbesbusinesscouncil/2021/12/10/does-your-company-have-a-real-corporate-purpose/?sh=6a03b7f318f6
  1. " “purpose washing.” Companies eager to jump on the purpose bandwagon — without having a true, meaningful purpose". "If it’s not real, consumers and employees alike are bound to notice and be unforgiving."

• ORGANISATIONAL PURPOSE: THE CONSTRUCT AND ITS ANTECEDENTS AND CONSEQUENCES Victoria Hurth, Charles Ebert & Jaideep Prabhu. Working Papers 201802, Cambridge Judge Business School, University of Cambridge. https://www.jbs.cam.ac.uk/wp-content/uploads/2020/08/wp1802.pdf
  1. "an organization’s meaningful and enduring reason to exist that aligns with long-term financial performance, provides a clear context for daily decision making, and unifies and motivates relevant stakeholders"
  2. "we undertake a review to show that the concept of organizational purpose is different from related concepts such as Corporate Social Responsibility (CSR), stakeholder theory, sustainability, shared value, vision, mission, and values."

• EXAMPLES https://examples.yourdictionary.com/dynamic-purpose-statement-examples-for-business-and-nonprofits.html
  1. Whole Foods Market: Our purpose is to nourish people and the planet
  2. General Mills: We serve the world by making food people love
  3. Kiva: We envision a financially inclusive world where all people hold the power to improve their lives