Organization 21C: Someday All Organizations Will Lead This Way

Inherent Business Differences and Their Impact on Balance

Two factors describing the underlying nature of a business largely determine whether there is likely to be a tendency toward stakeholder balance or imbalance. The first factor is whether the product or service may be regarded as “noble” in its own right (noble here may be interpreted as a product or service that serves broad societal interests, as well as producing individual customer satisfaction). The second factor is the average level of profitability that prevails in the industry. Figure 9-1 shows four basic and contrasting conditions in which a company may be situated. It is also true that, in such a four-cell matrix, companies in the upper right-hand cell (i.e., with noble products ...