What Is the Purpose of Business? Discuss.

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What is the purpose of business? Discuss. INTRODUCTION

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At a dinner party a doctor, a lawyer and a businessman are sitting around the table chatting and talking about their life and work. At one point another man approaches the table and asks the three men what the purpose of their jobs is. The doctor immediately responds that he wants to help people and save life. The lawyer takes over and says he fights for justice and equality but when it comes to the businessman to answer the question - he remains silent. Would a normal businessman have been able to give readily a precise answer as to the purpose of business? Would he have said is it all about money and making profit? Or would he have answered like Peter Drucker that the customer should have the highest priority in business life and everything should be done to satisfy him1. Or would he have responded like Dave Packard once said: “I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company’s existence, we have to go deeper and find the real reasons for our being...” 2 These quotes describe very well the difficulty in answering the question what the purpose of business is and the need for detailed analysis. As everybody is affected and surrounded by business every day, and since one can hardly imagine a world without business, it is crucial to know its purpose. Therefore it is the objective of this paper to examine in greater detail the nature and purpose of business and to demonstrate its importance to the whole world. “A business is any enterprise which makes, distributes or provides any article or service which the other members of the community need and are able and willing to pay for. “ 3

This is one of an abundant number of definitions of business. The following study will consider reasons for many different descriptions and objectives of business. It will also examine why and how business has developed throughout the course of time as well as who are the stakeholders of a company and what different interests and objectives drives them to do business.

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Peter F. Drucker,(1954), The Essential Drucker, 7th ed.,Oxford: Elsevier Ltd.,p.15 Harvard Business School Press, (2003), Harvard Business Review on Corporate Responsibility, Harvard Business School Publishing Corporation, Boston, MA, p. 80/81 l. 26 ff. 3 th R.P Maheswari, ,(2006),Principles of Business, 6 ed., New Delhi: Pitambar Publishing Company, p.1

What is the purpose of business? Discuss. DISCUSSION

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When talking about business and especially about the purpose of business we first of all have to distinguish between two perspectives, under which business can be seen from. On one hand there is the perspective of the customer, we all know and experience every time we go shopping, get a coffee or take the bus. On the other hand there is the perspective of the producer or provider of goods and services performed by businessmen in companies.4 Before scrutinizing each aspect individually, it is important to know what drives us to give business and economic behaviour such an important role in our life. The root of economic behaviour and business activity is deeply entrenched in the human mankind. We are willing to act economically and join business because of our self-interest in obtaining the maximum of wealth and prosperity. Adam Smith was one of the first to introduce this idea by establishing the picture of the Homo Oeconomicus. It describes the nature of human beings as “animals seeking after individual advantages” 5 This sketch of a man who is trying to reach the highest level of satisfaction is strongly connected with the economic problem of the shortage and lack of goods. Each of us has an abundant number of wishes and needs, but the possibilities to fulfil these endless desires are limited. This compels us to act economically and to limit our demands to the most essential ones. The result of this process is...
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