Social/Economic Roles of a Business

A business is an organisation that attempts to satisfy the needs and wants of a community by providing goods and services, however, a business does not exist only to serve the community, it also exists to maximise the financial investments of their owners. This is done through the social and economical role of a business. Economic roles are concerned with the financial impacts that the activities of a business have on various groups in the business environment. The economic roles are wealth creation, employment and innovation. Social roles are focused on the impacts of a business on the community. Social Roles are entrepreneurship, choice and quality of life.

Economic roles are important for a business as they can increase the value and funds via wealth creation, employment and innovation. Wealth creation is done by increasing sales and developing strategies to promote brand awareness and sales. This will increase the value of the funds that owners have invested in the business. Businesses also generate increased wealth for the community. The profits generated are then taxed by the government in order to fund essential services such as improving educational, health and transport facilities.
Employment is where the owners of a business will employ other people to perform various activities within the business. The goods and services that businesses provide to the community are formed using knowledge, skills and effort of human resources, because of this, employment is an important function in business.
The third economic role, innovation can be defined as the process of improving the features of a product. It could also apply to the production process where improved methods of production are implemented. The new methods may make use of fewer resources and result in increased output, which would benefit the business in many ways. In the business environment, innovation is crucial for a business to maintain its competitive advantage over other businesses.