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2024 | OriginalPaper | Chapter

3. Step 2: The Role of Purpose in Organizations and in Business Models

Author : Umberto Lago

Published in: Global Business Model Shift

Publisher: Springer Nature Switzerland

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Abstract

Moving from the brilliant statements of Peter Drucker, who asserted that the purpose of a company should be “to create a customer” and that the maximization of profit “does harm” to the business, this chapter discusses the purpose of a business in general before delving into the purpose within the RDHY model. Given Zhang Ruimin’s admiration for Peter Drucker’s work, it is not surprising that the purpose of the RDHY model aligns closely with Drucker’s ideas.

The chapter then proceeds to analyze how companies that are willing to implement this business model articulate its purpose within their unique business and geographical contexts. By examining various implementations, the chapter provides insights into the adaptability and effectiveness of the RDHY model across different settings, illustrating its potential to drive innovation and sustainable growth globally.

Through detailed examples and practical applications, readers will understand how the principles of the RDHY model can be tailored to diverse business environments, irrespective of companies’ size, industry, and location.

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previous chapter Step 1: What Is RenDanHeYi?

next chapter Step 3: Values and Beliefs (Corporate Culture) as the Foundation of Organizations

Harari, Y.N. (2015, p. 24).

Zohar, D. (2022, p. 45).

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Zohar, D. (2022, p. 51).

Drucker, P.F. (1954, p. 37).

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Drucker, P.F. (1954, p. 37).

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Above in “Step 1. What is RenDanHeYi?”, p. 16.

Zhang R. (2023).

The acquisition of Candy-Hoover has proven to be advantageous for Haier Europe for several reasons. Firstly, it served as a strategic move to enhance Haier’s product portfolio. Candy, as a part of the acquisition, brought a range of built-in products that complemented Haier’s existing offerings. These products filled the gaps in Haier’s product range, ensuring a more comprehensive and diversified selection for customers. Furthermore, the addition of Hoover vacuum cleaners, which were previously absent from Haier’s lineup, further expanded the company’s product offerings and strengthened its competitive position in the market.

Moreover, Candy’s expertise and leadership in connected products and connectivity played a crucial role in the decision to acquire the company. Haier recognizes the increasing importance of connected ecosystems and the Internet of Things (IoT) in the home appliance industry. By integrating Candy’s knowledge and capabilities in this area, Haier Europe gains a significant advantage in transforming traditional appliances into interconnected systems. This strategic alignment positions Haier Europe to meet the evolving demands of customers who seek integrated and smart home solutions.

This business case was prepared by Dr. Annika Steiber and Prof. Umberto Lago, based on Annika Steiber’s book: Leadership for a Digital World—The Transformation of GE Appliances, Springer, 2022.

Only in the USA.

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Title: Step 2: The Role of Purpose in Organizations and in Business Models
Author: Umberto Lago
Publisher: Springer Nature Switzerland
Book: Global Business Model Shift
Print ISBN: 978-3-031-64856-4

Electronic ISBN: 978-3-031-64857-1

Copyright Year: 2024
DOI: https://doi.org/10.1007/978-3-031-64857-1_3