John Mackey, the founder and CEO of Whole Foods, has taken a sort of blended position on the role of business in society. He begins his analysis by asking the purpose of hospitals and schools and concludes that they exist to benefit society. Those who work in hospitals and schools, teachers and doctors, undertake their work for the purposes of benefiting others. Mr. Mackey then concludes with this thought: Why should business be any different from other institutions and those who work in them?

Mr. Mackey believes that those who found businesses rarely go into business for the purpose of maximizing profits and that the goal of maximizing profits is a myth. Rather, he believes that most entrepreneurs create businesses for reasons other than maximizing profits. Their reasons for creating a business could be as simple as a desire to not have to work for someone else. Some business people simply enjoy the challenge of creating and growing a business, with some of them referred to as serial entrepreneurs. Sometimes the act of creation helps business founders with self-esteem or gives them an outlet for their creativity. Often, businesses are formed because the founder wanted to prove something to a parent, teacher, or friend - the business is a way of showing determination or gratitude. Quite often, a business is formed because founders believe that they have a product or service that could make the world a better place. In other words, many begin their businesses with a goal of improving society. Maximizing profits may be, in Mackey's mind, a by-product of the other reasons businesses are created.

Mackey does see that companies can do more good by being protitable and the profitability of business contributes to a healthy economy, something that helps those within a community. In fact, he sees profitability as one constituency of a business, a type of stakeholder in the company. He also realizes that businesses cannot grow without capital and obtaining capital requires that the business operate profitably. However, he believes that great businesses, and businesses that last, are those that are dedicated to "Service to Others." He believes that JetBlue, Southwest Airlines, Wegmans, Nordstrom, REI, The Container Store, and Whole Foods are all examples of successful businesses that live the mantra of "Service to Others."

Mackey believes that the profits follow when managers optimize the health and wellbeing of employees, customers, and vendors. Focusing on the health and value of the entire interdependent system (like the web of stakeholders in Figure 3.1) ensures that the company will be a dynamic, evolving entity that allows all within that web to grow and develop..............................

Discussion Questions 1. Explain Mr. Mackey's theory about entrepreneurs and why they go into business.
2. What is Mr. Mackey's concept of interdependent constituencies?