User:Neuralia/sandbox44

Business purpose expresses the company's reason for existing. It refers to the wider, long-term goals of a commercial enterprise, which may substantially differ from its mission statement, the latter generally representing a simplified, operational version of the former for a given period. The concept of purpose makes part of the ethical framing of a business, together with notions such as vision, mission, and values. Business purpose has been proposed to exist in one of two forms: current purpose, or mission; and future purpose, or vision, although a more complex relationship may exist between these categories, whereby the vision, mission, and values of a company may be seen to naturally derive from its purpose. Debate on the nature of purpose in business remains currently active.

"Mourkogiannis (2006) reports that company purpose is key to firm success because it is the primary source of achievement, it unravels the dynamics of human activity and matters of motivation and behavior, and it is the fundamental concern of successful leaders and a key driver of their activities." https://www.researchgate.net/profile/Karim-Ginena/publication/283435449_Rethinking_the_purpose_of_the_corporation_Challenges_from_stakeholder_theory/links/5964b3630f7e9bfb63cb66db/Rethinking-the-purpose-of-the-corporation-Challenges-from-stakeholder-theory.pdf

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.

He introduced the concept of purpose in the lexicon,'  where the term purpose refers to the actualization of the inherent potential of everything and everybody, in a way resembling the notion of  raison d'être '.

https://www.forbes.fr/business/pourquoi-la-raison-detre-dans-les-entreprises-est-plus-quun-effet-de-mode/

https://en.fifty.do/blog/raison-detre

Other classic philosophers dealing with matters related to the purpose of business are Kant, Kierkegaard, David Hume, and Nietzsche.

The concept has evolved and undergone in-depth revision in the present era.

Early modern discussion on the topic of business purpose doctrine occurred in mid-20th century in the specific context of its relevance to tax-saving provisions in the US Internal Revenue Code. In 1964, businessman Fre derick Kappel published a volume containing a selection from his speeches dealing with the subject and its relation to performance.

The advenment of social responsibility theories in the 1960's brought about demands for businesses to widen their scope with respect to the beneficiaries of their operations to include actors beyond the owners themselves, and for companies to share with the state the economic burden of attending social needs present in the communities within their areas of operation.

Support for Friedman's initial views on the purpose of business was published in 1993 by British philosopher Elizabeth Vallance, and later on by Henderson, in his book "Misguided Virtue: False Notions of Corporate Social Responsibility." "David Henderson examines the CSR doctrine, subjecting it to fundamental ciriticisms. In this controversial text he argues that, far from being harmless, its adoption threatens prosperity in poor countries as well as rich. It is likely to reduce competition and economic freedom and to undermine the market economy." Henderson, David (2001). Misguided Virtue: False Notions of Corporate Social Responsibility. Institute of Economic Affairs. p. 171. ISBN 978-0-255-365109.

https://iea.org.uk/publications/research/misguided-virtue-false-notions-of-corporate-social-responsibility

"the idea of maximizing profits is replaced by that of achieving 'acceptable returns', while business's 'contribution to society' is explicitly -and wrongly- viewed as distinct from its profit-maximizing activities" (page 41)

The earliest books on the subject in the 21st century were those by Richard Ellsworth in 2002 and Nikos Murkogiannis in 2006.

The idea initially put forward by Friedman, in 1970, that the purpose of firms is to maximize profits or market value of a firm, was subsequently challenged by authors like Drucker in 1985, Carson in 1999, and Jordi in 2010, 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 "responsibiliti es towards people, clients, shareholders, and society at large". Thus, the concept of business purpose has been widened by some, to include not only the basic role of the organization, but also other reasons for being, its vision, values, scope of business, public image, and beyond; this move occuring very much in parallel with the advance of corporate social responsibility theory. Although not going as far as philanthropy, where corporations actually donate money, CSR does imply the direct involvement of corporations in expenses towards solving social and environmental  issues in their zones of influence. Taking an openly pro-CSR line, in 1919 the Business Rountable, a noted American non-profit group of large-company CEOs based in Washington DC, redefined its prior definition of the purpose of a corporation, putting the interests of employees, customers, suppliers and communities on par with those of shareholders.

'''Conversely, in his 2005 book "Purpose: The Starting Point of Great Companies", Mourkogiannis explicitly denied that social responsibility should make part of the purpose of a corporation. (204) The author makes''' a distinction between purpose and categories such as reputation, codes of practice, firm principles, corporate governance, and long-term thinking, and considers legitimate purposes only those which can be marked as sources of sustainable advantage for the corporation. He judges business purpose to lie in the intersection of competitiveness and morality, the latter based on prevailing ideas of what is good and what is bad, particularly ideas of leadership, morality, sustainability, and competitiveness.

Deciding on purpose archetypes: discovery, excellence, altruism, or heroism. By the same token, Dan Pontefract has advocated for a clearcut separation of CSR from the purpose of a business, sustaining that, independently of CSR practices, the purpose of a company is to ensure its own sustainability.

Current debate
Related topic: Corporate social responsibility

The debate about the role of business in society and its implications regarding public policy is visibly active these days, with participation of actors holding opposing views on contemporary issues directly linked to CSR, particularly in the case of climate change. Despite broadly declared support to CSR as part of the purpose of businesses, signs of recoil in the real-life commitment of the corporate world to environmental protection CSR policies have be noted in recent news. Signs of such recoiling might be the following:


 * According to WSJ sources, 2022 has brought about a wave of investors voting against the election of sustainability and climate change oriented corporate directors in the US.
 * On 15 March 2021, the CEO of Danone was ousted by the Board for promoting stakeholder capitalism and ESG (Environment Social Responsibility and Governance) measurements while underperforming its key competitors for five years.
 * In 2022 investors have been asking for the ouster of all the top management of Unilever for being obsessed with climate sustainability criteria and ESG measurements at the expense of performance and profitability.
 * On 10 May 2022, BlackRock, the world`s largest money manager, with nearly $10.3 trillion in assets, and a big force pressuring companies to proclaim resisting climate as corporate purpose, announced that it will not be supporting most shareholder resolutions tabled to be discussed this year because they have become too extreme and prescriptive and not consistent with its clients long term financial interest.

There was, however, a backlash. When several of these ideas, ESPECIALY THOSE RELATED TO CLIMATE CHANGE, became mandatory and the energy AND INFLATION crisis of 2022 erupted, several business leaders argued that they would allow managers to escape responsibility for performance and create a disadvantage for companies that adopt them. Friedman’s role as advisor to both President Reagan and Thatcher helped render the debate partisan since its beginning. Several eminent authors have joined the debate, including Carson in 1999, Ellsworth in 2002, Naomi Klein in 2007, Jordi Canals in 2010 and Harvard Business School Professors Bower and Paine. Their ideas are reflected on current legislation, court decisions and metrics, such ESG (Environment Social Responsibility and Governance). A plethora of books, such as Start with Why by Simon Sinek in 2009, Conscious Capitalism by John Mackey, Raj Sisodia in 2014, Good is the new Cool by Afdhel Aziz in 2021, Deep Purpose by Ranjay Gulati in 2022, followed about the importance of corporate purpose. Some proposed it is a replacement of the firm`s mission or vision. Some saw it as a tool to motivate employees*** and customers and to develop individuals to become leaders. THE LATER ARE OFTEN commingling CORPORATE PURPOSE WITH THAT OF AN INDIVIDUAL, WHICH ARISTOTLE AND OTHERS DEEMED NECESSARY FOR UNDERSTANDING THE MEANING OF LIFE. Others focused on THE ABILITY OF CORPORATE PURPOSE to strengthen the brand. Several saw purpose as subjectively defined or equal to the service of any good cause.*** Finally, many saw it as measurable and defined by social responsibility, stakeholder management and reversal of climate change.