In his latest online column for Time magazine, Drucker Institute Executive Director Rick Wartzman writes about a new study from the Aspen Institute on the purpose of the corporation.
The study, says Wartzman, captures the “defining divide in today’s business world: those who hold that ‘maximizing shareholder value’ is a corporation’s primary mission versus those who believe that companies have an obligation to provide benefit to a multitude of stakeholders.”
It is “a clash,” he adds, “being waged by individuals who cling to their own dogma and tend to talk right past one another.”
Wartzman traces the history of the stakeholder-shareholder debate and notes that Peter Drucker “had problems with each of these positions, at least in their most extreme forms.” Trying to balance the interests of all stakeholders, a philosophy in fashion in the 1950s, led to too little accountability from top management. Putting shareholders first has tended to encourage dangerously short-term thinking.
But the Aspen study provides “some glimmers of promise,” Wartzman writes. “Notably, more than half of the respondents either strongly or somewhat strongly agreed that the primary purpose of the corporation is to serve customers’ interests”—an idea more in accord with Drucker’s thinking.
A final word: “After more than six and a half years of tying Peter Drucker’s timeless insights to current events—first at BusinessWeek, then at Forbes and now at Time—the moment has come to turn my attention to other priorities and other writing,” Wartzman says. But even though “The Drucker Difference” column is being retired, he points out that the conversation will continue @DruckerInst: “I look forward to seeing you there.”