The management guru Peter Drucker was fond of saying the purpose of a business is to create a customer. In other words, the purpose of a business is to create customer value, not shareholder value. This is not to say that shareholder value is not important. Quite the contrary, shareholder value is essential for the survival of companies because without sustained profits a business cannot survive. What we are saying is shareholder value is not the purpose, but rather the reward that companies receive when they deliver customer value.
Thinking Outside-In
Thinking Outside-In
Thinking Outside-In
The management guru Peter Drucker was fond of saying the purpose of a business is to create a customer. In other words, the purpose of a business is to create customer value, not shareholder value. This is not to say that shareholder value is not important. Quite the contrary, shareholder value is essential for the survival of companies because without sustained profits a business cannot survive. What we are saying is shareholder value is not the purpose, but rather the reward that companies receive when they deliver customer value.