The role of business in society
NEW GROUND RULES OF GLOBALISATION
Communication is becoming more widespread and reaching even further. Telephony, the Internet and e-mail, and satellites that transmit TV broadcasts all over the world are all helping to facilitate contact between people and provide instantaneous information from absolutely anywhere in the world. Inventions and medical breakthroughs which enhance the quality of life and lengthen the lives of many people are also becoming more widespread, more quickly than ever before.
Countries and people have become entwined, mutually dependent. And together we face a number of challenges. Together, we have to tackle environmental problems, poverty and terrorism. Paradoxically, this also creates endless synergies. Democracy, human rights and the market economy have increasingly become values that unite countries; values that in different ways help to bring about improvements for the people of the world. This is globalisation. Swedish companies are all part of the process. By as early as the turn of the previous century, many of Sweden’s major companies had begun to look overseas for new markets. This process has continued with undiminished vigour and was slowed only by the two World Wars. Swedish business is now some of the most globalised in the world. Some 4,000 of the 60,000 or so multinationals in the world are of Swedish origin. Swedish companies buy and sell products and services and have set up manufacturing and subsidiaries in numerous countries. Globalisation has been hotly debated in the last 10-15 years. Critics point to what they see as the negative effects of free trade, increased foreign investment and the movement of capital. Debate has begun to focus ever more on development objectives, sustainable development and the fight against poverty. More and more people, United Nations bodies included, have come to recognise and understand the part business has to play in reaching these goals. At the same time, many people are questioning the roles of individual companies. What should their involvement be? What are their responsibilities?
BUSINESS BENEFITS SOCIETY
The basic objective of business is to develop, produce and supply goods and services to customers. This has to be done in such a way as to allow companies to make a profit, which in turn demands far more than just skills in companies’ own fields and processes. Astute entrepreneurs often demonstrate an almost intuitive understanding of the synergies that create success. The social skills of company owners, together with relationships maintained with customers, suppliers and other business people, are always vital if companies are to be run well and developed with a view to the future.
Companies improve their resources by developing materials and ideas. The goods and services produced must meet demands made by customers, other companies or public institutions if companies are to survive. Profitability results when customers are prepared to pay more for goods and services than it costs to produce them.
The ability to produce this kind of added value – profit – is the basic prerequisite for business, but it is also a foundation for prosperity in society. Only profitable companies are sustainable in the long term and capable of creating goods, services, processes, return on capital, work opportunities and a tax base. This is what business does better than any other sector. Hence, companies’ basic commercial operations are the primary benefit they bring to society. 5
Companies benefit society by:
Supplying goods and services that customer cannot, or do not want to, produce themselves
Creating jobs for customers, suppliers, distributors and coworkers. These people make money to support themselves and
their families, pay taxes and use their wages to buy goods and services
Continually developing new goods, services and processes Investing in new technologies and in the skills of employees...
Please join StudyMode to read the full document