This highlights the contrast between the neoclassical view of corporate purpose as a monolithic, monotonic task of maximization and a more fine-grained life-cycle perspective that recognizes that corporations go through different stages and that their value-creation processes and purposes will change over time. Lev uses the latter to good effect on several occasions, but then subordinates it to the ideological demands of neoclassical economics. Executives, who have to deliver sustainable results, don’t always have the freedom to follow ideological dictates, but they can learn many practical lessons in managing investors from Lev.
- David K. Hurst is a contributing editor of strategy+business. His latest book is The New Ecology of Leadership: Business Mastery in a Chaotic World (Columbia University Press, 2012).