Role of Business

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T. Kempner, K. H. Hawkins K. MacMillan and This is one of a series of articles dealing with social and political issues relevant to business. It is intended to present some of the dilemmas which face top management in setting objectives and policies for the business. A number of key issues are isolated, matching economic objectives and social responsibilities, defining the tile of the huge multi-national company, reconciling the different aims of owners, managers, and employees. etc. Finally the authors pose the problem: how should the modern corporation be controlled to ensure that it operates in the interests of the community at large, as well as the shareholders?

about the role of Business in Society. In it we describe the general area of the subject and indicate the kinds of problems to which attention must be given. Our particular concern in this article is with wider business objectives. Business Policy is the study of the functions and responsibilities of senior management and the problems which affect the character and success of the total enterprize. Organizations choose strategies which fit their objectives. These strategies stem from management’s understanding of the changing environment-cultural, social and economic. Objectives are often expressed in economic (or profit) terms, although for non-profit organizations other criteria will apply. In the simplest terms the organization monitors the environment (this may be an Professor Kempner is Director of the Management Centre, and Professor of Management Studies at the University of Bradford. Kevin Hawkins is a University Lecturer in Management Studies. Keith MacMillan is Lecturer in Economics, Trinity and All Saints College, Leeds.






intuitive rather than a conscious process) and formulates or reformulates its objectives. Strategies and planning processes then follow to translate the objectives into desired outcomes. The process described in the last paragraph is subject to constraints which may change over time. For example, they include various aspects of Government policy, some of which may be embodied in law. Others are determined by pressure groups such as trade unions or consumer councils. A more general area includes the changes induced by new beliefs about tolerable behaviour-for instance on pollution. The nature of the social responsibilities of organizations is a changing and often nebulous concept. Nevertheless, it is a matter of rapidly increasing importance. It is our contention that these issues may replace economic growth as the major area of discussion in the next decade. For the societies of advanced countries can now afford the luxury of concern over quality rather than quantity-a point to which we

shall refer again below. The task of the chief executive in a large modern company has never been more difficult than it is at the moment. It is on the chief executive-the corporate leader-that the ultimate responsibility for the performance of the organization under his control rests. Yet the criteria for evaluating business performance are increasingly open to question just as the character of business organization itself is currently undergoing rapid change. A priori one can see that the performance of a business firmis a direct function of its organizational structure. Performance Criteria

There have been few periods in history in which business, broadly defined, has not been scrutinized by individuals and interest groups fundamentally out of sympathy with the conventional objectives of commercial enter-prize. Hostile criticism of this kind has always sprung from a realization that there is an apparent dichotomy between the objectives and





methods of business. Let us assume that the objectives of business enterprize are primarily economic in the sense that they are concerned with the allocation of resources, In any...
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