Wednesday, 8 July 2009

The goal of management

I've listened to countless arguments between people about whether the goal of the enterprise is to serve the shareholder or the customer. The truth is, it's both, plus more.

The goal of management is to negotatiate a deal between the competing interest of customers, shareholder, employees and any related special interest groups, such as regulators, consumer activist groups, and the like. To succeed, that deal must create sustainable value for all parties in proportion to their relative power.